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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2009-04-07 Daily Xml
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HOMESTART FINANCE

In reply to Ms CHAPMAN (Bragg—Deputy Leader of the Opposition) (11 November 2008).

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations): I have been advised that HomeStart Finance sets interest rates to ensure that financial performance targets are met and with the aim of remaining generally in line with market rates. Adjustments to HomeStart's variable interest rate require approval by the Asset and Liability Committee, a sub-committee of the HomeStart Board. In line with Board-approved policies, changes to HomeStart's variable interest rate are generally passed on to customers within 15 days, regardless of whether the change is up or down.

The HomeStart loan is unique in that loan instalments are generally not adjusted when interest rates change. Consequently, even though interest rates have moved up and down quite significantly in the past few months, customers' instalments were not directly affected and remain subject to indexation at a rate equivalent to CPI.

Announcements of changes to the HomeStart variable interest rate are made in The Advertiser prior to the adjustment taking effect.

Certain customer groups have different interest rate notification requirements and HomeStart complies with its relevant contractual or legislative obligations in these specific cases.

In general HomeStart may take a few more days to publicly announce their interest rate changes but the timing of the rate change is generally similar to that of the major banks.

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