ME hikes home loans by up to 30 basis points

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on May 04, 2020
ME hikes home loans by up to 30 basis points

Photo by Mats Hagwall on Unsplash

ME on Friday raised certain owner occupier fixed home loan interest rates by up to 30 basis points after they were reduced in late March.

As a pinch and a punch for the first day of the month, ME raised its fixed owner occupier home loans for one, two and three years paying principal and interest (P&I) by between 10 and 30 basis points.

The rates are now:

  • Flexible Fixed 1 Year: 10 basis point rise to 2.54% p.a. (4.17% p.a. comparison rate*)
  • Flexible Fixed 2 Years: 30 basis point rise to 2.64% p.a. (4.03% p.a. comparison rate*)
  • Flexible Fixed 3 Years: 30 basis point rise to 2.74% p.a. (3.93% p.a. comparison rate*)

ME's packaged loans also received the same treatment, and to get the most competitive rates borrowers must have a minimum 20% deposit i.e. 80% LVR.

This represents a partial reversal of ME's decision on 26 March to slash rates by up to 134 basis points as a discount spurred on by coronavirus. 

At the time, ME CEO Jamie McPhee said that by offering its lowest ever suite of fixed rate home loan packages, ME was helping borrowers to reduce their repayments during this difficult time.

“Fixed rates provide borrowers with repayment certainty," Mr McPhee said.

"By offering record-low 1-, 2- and 3-year fixed rates and competitive rates across a range of other terms, borrowers can achieve peace of mind by locking in a historically low repayment to help them through this challenging period.”

On the decision to hike a number of fixed rates last week, a ME spokesperson told Savings.com.au it's "all just the usual adjustments in market position."

However, ME did cut rates on its owner occupier fixed four year loans by 10 basis points, and by 20 basis points for five year fixed terms.

Additionally, even with the rate hike, ME's fixed home loan rates are still very competitive, and are comparable to variable home loan rates, as seen below.

Lender
Advertised rate Comparison rate* Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
FixedMore details
NO UPFRONT OR ONGOING FEES

Basic Home Loan Fixed (Principal and Interest) (LVR < 70%) 3 Years

NO UPFRONT OR ONGOING FEES
FixedMore details
  • Easy, digital application process
  • Market leading app to help you pay off your loan sooner
  • No on-going fees
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Variable Owner Occupied, Principal and Interest (Refinance Only)(LVR <75%)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
REFINANCE IN MINUTES, NOT WEEKS

Variable Owner Occupied, Principal and Interest (Refinance Only)(LVR <75%)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *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. Rates correct as of January 26, 2022. View disclaimer.

Other home loan rate cuts

Marketwide, again, the bulk of cuts were made to fixed loan products.

CUA cut its one and two year fixed investor loans paying P&I (principal and interest) by up to 101 basis points (more details below) in the past week.

Larger cuts by up to 140 basis points were made to CUA's interest only (IO) loans as well, but for the sake of comparison we'll look solely at P&I products.

Other lenders to cut in the past week include Hume Bank, UBank, ME Bank, Sydney Mutual, and Endeavour Mutual, continuing the narrative of customer-owned banks cutting.

CUA

Cuts were made primarily to investment home loans, fixed between one and five years, and include:

  • 1 Year Fixed Investor P&I: 101 basis point cut to 2.69% p.a. (4.82% p.a. comparison rate*)
  • 2 Year Fixed Investor P&I: 101 basis point cut to 2.69% p.a. (4.62% p.a. comparison rate*)
  • 3 Year Fixed Investor P&I: 45 basis point cut to 2.69% p.a. (4.44% p.a. comparison rate*)
  • 5 Year Fixed Investor P&I: 71 basis point cut to 2.99% p.a. (4.23% p.a. comparison rate*)

Hume Bank

Hume Bank made a wide variety of cuts across both owner occupier and investment loans. Key cuts are below:

  • 2 Year Fixed Intro P&I 70%: 65 basis point cut to 2.29% p.a. (4.06% p.a. comparison rate*)
  • First Home Starters Package 2 Year Fixed Intro 150k+: 20 basis point cut to 2.39% p.a. (3.87% p.a. comparison rate*)

And for investors...

  • Investment P&I Fixed 1 Year: 20 basis point cut to 2.99% p.a. (4.85% p.a. comparison rate*)
  • Investment P&I Fixed 2 Years: 40 basis point cut to 2.79% p.a. (4.63% p.a. comparison rate*)
  • Investment P&I Fixed 3 Years: 40 basis point cut to 2.79% p.a. (4.46% p.a. comparison rate*)

UBank

UBank was another lender that cut fixed investment loans - this time by up to 50 basis points.

  • Inv UHomeLoan Fixed 1 Year P&I: 45 basis point cut to 2.44% p.a. (3.57% p.a. comparison rate*)
  • Inv UHomeLoan Fixed 3 Year P&I: 40 basis point cut to 2.44% p.a. (3.30% p.a. comparison rate*)
  • Inv UHomeLoan Fixed 5 Year P&I: 50 basis point cut to 2.74% p.a. (3.26% p.a. comparison rate*)

Sydney Mutual Bank & Endeavour Mutual Bank

Have a Captain Cook of Endeavour's home loan rate cuts, as well as Sydney Mutual's - the two mutual banks merged in 2019 and feature many of the same products.

  • Investment Fixed P&I 1 Year: 35 basis point cut to 2.69% p.a. (3.46% p.a. comparison rate*)
  • Investment Fixed P&I 2 Year: 35 basis point cut to 2.69% p.a. (3.40% p.a. comparison rate*)
  • Investment Fixed P&I 3 Year: 35 basis point cut to 2.64% p.a. (3.32% p.a. comparison rate*)
  • Investment FIxed P&I 5 Year: 35 basis point cut to 3.19% p.a. (3.42% p.a. comparison rate*)

And for owner occupiers looking for a variable rate:

  • Basic Variable Home Loan: 10 basis point cut to 2.87% p.a.(2.93% p.a. comparison rate*)
  • First Home Buyer Basic: 10 basis point cut to 2.87% p.a. (2.90% p.a. comparison rate*)
  • First Home Buyer Standard: 10 basis point cut to 2.97% p.a. (3.00% p.a. comparison rate*)

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. 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. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison is passionate about breaking down complex financial topics for the everyday consumer.

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