Bank slashes variable rates

ME Bank has announced that it has cut its rates by up to 59 bps to below 3 per cent on its variable rate Basic Home Loan.

ME’s lowest variable rate for new customers is now 2.58 per cent.

New and refinancing owner-occupier borrowers paying principal and interest with a minimum loan balance of $150,000 are eligible.

Customers applying for the Basic Home Loan variable rate, principal and interest with a loan-to-value ratio (LVR) of 80 per cent or less will see rates start from 2.58 per cent, down from the previous 3.17 per cent.

Those with an LVR more than 80 per cent will see rates start from the 2.99 per cent rate, a 53 bps reduction from the previous 3.52 per cent.

ME general manager, home lending, Andrew Bartolo said: “This new offer delivers exactly what many Australians want – simplicity, low rates and no ongoing account-keeping fees.

“ME’s Basic Home Loan is already very simple, with no frills or fancy features and no ongoing account-keeping fees.”

All changes are effective from 28 August, with applications submitted on or after this date eligible for the new rates.

The latest reductions follow rate cuts made last week by ME Bank for owner-occupiers taking out shorter-term fixed-rate home loans.

The industry fund-owned bank made rate cuts of up to 40 bps across its one-, two- and three-year fixed-rate mortgages for new and refinancing owner-occupier borrowers on principal and interest repayments with an LVR of 90 per cent or less.

Other lenders have also cut rates across their fixed and variable loan products as the record-low cash rate fosters strong competition.

[Related: Banks avert mortgage crisis in RBA stress test]