ME Bank cuts fixed rate home loans to under 3%

author-avatar By on October 14, 2019
ME Bank cuts fixed rate home loans to under 3%

Photo by Aaron Burden on Unsplash

ME Bank has today announced its lowest ever rate, cutting its two year fixed home loan rate to 2.88% p.a (3.96% p.a. comparison rate*).

The new rate is available to owner-occupier home loan customers with a Flexible Home Loan Member Package, paying principal and interest with a loan to value ratio (LVR) of less than or equal to 90%.

The bank has made a host of changes across fixed rate products, with cuts of up to 60 basis points.

This is the fifth major home loan rate cut ME has made this year following the three cash rate cuts by the Reserve Bank in June, July and October.

A $395 annual Member Package fee applies to all loans and all changes are effective as of 14 October 2019 – today.

The bank also recently announced that it would be cutting variable rates by 15 basis points, effective from 24 October 2019.

In June and July, ME cut variable rates by 25 and 20 basis points respectively.

The table below shows a collection of some of the lowest fixed interest rates on the market.

Provider
Ad rate
p.a.
Comp rate*
p.a.
Monthly
repayments
 
2.29% 2.98% $1,537 Go to site
2.19% 3.88% $1,517 More details

Base criteria of: a $400,000 loan amount, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the product provider’s web site. Introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term. Rates correct as at 03 August 2020. View disclaimer.

Check out the full list of changes below.

ME Bank fixed rate changes

For customers with a Flexible Home Loan with a Member Package, owner-occupied (OO), principal & interest (P&I), ≤90% LVR:

  • Two year rate cut by 39 basis points from 3.27% p.a. to 2.88% p.a. (3.96% p.a. comparison rate*)
  • Four year rate cut by 40 basis points from 3.58% p.a. to 3.18% p.a. 
    (3.94% p.a. comparison rate*)
  • Five year rate cut by 50 basis points from 3.58% p.a. to 2.99% p.a. 
    (3.83% p.a. comparison rate*)

For customers with a Flexible Home Loan with a Member Package, investment, P&I, ≤90% LVR:

  • Two year rate cut by 40 basis points from 3.58% p.a. to 3.18% p.a. 
    (4.16% p.a. comparison rate*)
  • Three year rate cut by 20 basis points from 3.48% p.a. to 3.28% p.a. 
    (4.01% p.a. comparison rate*)
  • Four year rate cut by 60 basis points from 3.88% p.a. to 3.28% p.a. 
    (4.09% p.a. comparison rate*)
  • Five year rate cut by 60 basis points from 3.88% p.a. to 3.28% p.a. 
    (4.05% p.a. comparison rate*)

For customers with a Flexible Home Loan with a Member Package, interest-only, P&I, ≤80% LVR:

  • Two year rate cut by 41 basis points from 3.79% p.a. to 3.38% p.a. 
    (4.06% p.a. comparison rate*)
  • Four year rate cut by 30 basis points from 3.99% p.a. to 3.69% p.a. 
    (4.11% p.a. comparison rate*)
  • Five year rate cut by 30 basis points from 3.99% p.a. to 3.69% p.a. 
    (4.11% p.a. comparison rate*)

ME savings account rate change

ME also decreased the maximum interest rate on its Online Savings Account product by 15 basis points last week, taking it to a new total rate of 2.20% p.a.

The base rate on this account was reduced by 30 basis points from 0.80% p.a. to 0.50% p.a, while the bonus rate was increased from 1.55% p.a. to 1.70% p.a.

To earn the bonus rate on top of the base rate, ME customers must:

  • Have both ME’s Online Savings Account and Everyday Transaction Account linked
    Make at least four tap & g purchases per month
  • Have no more than $250,000 deposited

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2019) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au and loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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Alex joined Savings.com.au in 2019. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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