Yellow Brick Road has announced that it will extend its commitment to not lift variable interest rates on its home loan products beyond any official Reserve Bank of Australia (RBA) change from the end of 2010 to 1 February 2011.
Executive chairman of Yellow Brick Road Mark Bouris, said the move was made possible as a result of Yellow Brick Road’s funding partnership with Gateway Credit Union.
The pledge follows the Commonwealth Bank’s recent announcement that it would add 0.45 per cent to its standard variable interest rate – nearly double that of the RBA rate rise.
“I’m calling on all the small lenders – the regional banks, the credit unions, and other lenders like Yellow Brick Road – to get back in the game and take on the big banks like they did in the 1990s,” Mr Bouris said.
“Borrowers are desperate to find alternatives to the major banks and we need to let them know these alternatives are alive and well.”
Paul Thomas, CEO of Gateway Credit Union said funding costs had risen but he did not want to see these costs clawed back from borrowers.
“As a not-for-profit financial co-operative we are not focussed on external shareholders. The dividends we return to members are in the form of better services and pricing, and that’s why we are able to make the commitment we’ve made, in partnership with Yellow Brick Road, to not lift rates beyond any RBA increase.”