The biggest cuts were to Freedom Lend's four and five-year fixed interest-only (IO) home loans, cut by 57 basis points. 

Both of them have an advertised rate of 2.77% p.a, and a comparison rate of 3.12% p.a.*

Borrowers must have a minimum 20% deposit to qualify for this loan (an 80% LVR). 

Freedom Lend also cut a wide variety of other loans by between 2 and 52 basis points.

A couple of noteworthy variable loans to get a haircut were:

  • Investment Freedom Variable P&I 70%: 27 basis point cut to 2.27% p.a. (2.27% p.a. comparison rate*)
  • Freedom Variable IO 70%: 32 basis point cut to 2.27% p.a. (2.33% p.a. comparison rate*)

Meanwhile, ME Bank cut a variety of packaged loans by between 15 and 20 basis points, including:

  • Member Package Flexible OO P&I 80%: 20 basis point cut to 2.49% p.a. (2.95% p.a. comparison rate*)
  • Member Package Flexible Inv P&I 80%: 15 basis point cut to 2.98% p.a. (3.43% p.a. comparison rate*)

The important caveat with these home loans is that it's for a minimum borrowing amount of $700,000, which, implying you have a 20% deposit equates to a property price of $875,000. 

For borrowers borrowing more modest amounts, the changes look similar on the surface, but keep an eye on that comparison rate:

  • Member Package Flexible OO P&I 80%: 15 basis point cut to 2.59% p.a. (3.05% p.a. comparison rate*)
  • Member Package Flexible Inv P&I 80%: 15 basis point cut to 2.98% p.a. (3.43% p.a. comparison rate*)

These home loans with the applicable comparison rate are for borrowed amounts between $400,000 and $700,000. 

These are variable rates, but also keep in mind that ME Bank calls some fixed home loans 'Flexible' loans too.

The 'Member Package' is slightly different from the traditional definition of a packaged home loan, which bundles credit cards and other products.

Instead, ME's 'package' is a flexible add-on that charges $395 per year, and in return borrowers receive no valuation costs, a lower variable interest rate, no fee for fixing, no fee for splitting, and no fee for topping up.

Ordinarily these features would cost $200 to $250 a pop. 

Photo by Patrick Perkins on Unsplash



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