Bank cuts mortgage rates, scraps maximum loan threshold

Teachers Mutual Bank Limited (TMB) – which includes Teachers Mutual Bank, Firefighters Mutual Bank, UniBank, and Health Professionals Bank – has cut home loan rates for owner-occupiers and investors with both principal and interest (P&I) and interest-only (IO) terms by up to 74 bps.

The changes apply to both fixed and variable rate products and are effective for new loans submitted from Sunday, 1 March.   

For owner-occupiers:

• variable P&I rates on its Solutions Plus Home Loan have been cut by up to 74 bps, and now start from 3.08 per cent (3.12 per cent comparison rate)
• variable IO rates have been cut by up to 56 bps, and now start from 3.73 per cent (3.36 per cent comparison rate).
• fixed IO rates have been cut by up to 32 bps, starting from 3.13 per cent (4.28 per cent comparison rate).

For investors:

• fixed P&I rates have been cut by up to 25 bps, and now start from 3.13 per cent (4.27 per cent).
• fixed IO rates have been cut by up to 20 bps, starting from 3.28 per cent (4.32 per cent comparison rate).

Following the announcement, TMB’s head of third-party distribution Mark Middleton told Mortgage Business: “Teachers Mutual Bank Limited has made a decision to review our rates and move them accordingly to promote new business and competition in our offering.”

TMB is the latest lender to reduce its mortgage rates, with ME,  ANZ, the Commonwealth Bank of Australia, its subsidiary Bankwest, Westpac, Heritage Bank and BOQ subsidiary Virgin Money recently cutting rates by up to 125 bps.

Mortgage rate could be set to fall further, with analysts continuing to expect additional cuts to the cash rate in the first half of 2020.

Meanwhile, TMB has also announced that maximum loan thresholds will no longer apply to any of its home loan offerings, with loans only subject to serviceability and security tests.

TMB Limited’s policy change is applicable across all of its brands.

[Related: Bank cuts variable, fixed home loan rates]