Bank cuts variable, fixed home loan rates

ME has repriced its variable and fixed Flexible Home Loan (Member Package) products for both new owner-occupiers and investors, effective 25 February.

The changes apply to borrowers with both principal and interest (P&I) and interest-only (IO) repayment terms.  

For owner-occupiers:

• variable P&I rates have been cut by 10 bps to 3.09 per cent (3.53 per cent comparison rate) for loans between $400,000 to $700,000; and
• variable P&I rates have been cut by 10 bps to 3.04 per cent (3.48 per cent comparison rate) for loans over $700,000.

For investors:

• variable P&I rates have been cut by 15 bps to 3.38 per cent (3.82 per cent comparison rate) for loans between $400,000 to $700,000;
• variable P&I rates have been cut by 10 bps to 3.38 per cent (3.82 per cent comparison rate) for loans over $700,000;
• variable IO rates have been cut by 16 bps to 3.58 per cent (3.90 per cent comparison rate) for all loans over $400,000;
• three-year fixed P&I rates have been cut by 19 bps to 3.09 per cent (3.97 per cent comparison rate); and
• three-year fixed IO rates have been cut by 61 bps to 3.28 per cent (4.02 per cent comparison rate).

ME is the latest lender to reprice its home loan rates, with the likes of 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.

AMP chief economist Shane Oliver is expecting the cash rate to drop to 0.25 per cent in order to help achieve the RBA’s targets of sustainable growth in the economy, full employment and 2-3 per cent annual inflation.

[Related: ANZ slashes home loan rates by up to 86 bps]