Lender cuts IO rates by 20 bps

A non-major lender has announced a spate of rate cuts across its owner-occupier loans.

As of 28 July, ME Bank is lowering owner-occupier interest rates for both interest-only (IO) and principal and interest (P&I) loans by up to 20 basis points.

Customers with fixed rates paying IO will see rates cut by 0.14 per cent for two-year terms to 4.54 per cent per annum (p.a.), while those with three-year terms will see rates fall by 0.20 per cent to 4.79 per cent p.a.

Fixed P&I repayments will be cut for two-year terms by 0.14 per cent to 3.74 per cent p.a. Customers with three-year terms will see cuts of 0.20 per cent to 3.99 per cent p.a.

New clients making IO repayments on variable rate loans with maximum loan to value ratios (LVR) of 80 per cent will see rates fall by 0.05 per cent. The new rates for clients with loans between $150,000 and $400,000 is 4.59 per cent p.a., while clients with loans of $400,000 up to $700,000 will have rates of 4.54 per cent p.a.

At the same time, new clients with LVRs of 80 per cent or less making P&I repayments on variable rate loans will also see rates fall by 0.05 per cent. Clients making repayments on loans of between $150,000 and $400,000 will see rates fall to 3.79 per cent p.a., while those in the $400,000 to $700,000 bracket will have a new 3.74 per cent p.a. rate. 

[Related: Lender increases IO variable rates by 30 bps]

 

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Lucy Dean

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