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ME Bank, Bankwest and UBank are the latest lenders to announce home loan rate reductions following the Reserve Bank of Australia’s (RBA) decision to cut the cash rate to 0.75 per cent.
ME has announced that it will cut variable rates across its mortgage products by 15 bps, falling short of the full 25 bps reduction.
The changes will apply to both new and existing customers and will take effect from 24 October.
ME revealed that its online savings account interest rate (base and bonus rate) will also be cut by 15 bps, effective 8 October.
“In setting rates, ME has sought to strike a balance between depositors and home loan borrowers, as well as ensuring the pricing of products remains sustainable given the record-low interest rate environment,” the bank noted in a statement.
Meanwhile, Commonwealth Bank subsidiary Bankwest has announced that it will reduce variable home loan rates by between 13 and 25 bps, mirroring changes made by its parent company.
Bankwest’s rate changes will come into effect on Wednesday, 16 October.
The non-major’s standard variable rates (SVRs) will start from 5 per cent for owner-occupiers and 5.65 per cent for investors.
NAB subsidiary UBank has also reduced its variable mortgage rates.
Unlike its parent company, UBank has passed on the full 25 bps cut, with its changes to apply to all new and existing customers from 29 October 2019.
From 29 October, UBank’s mortgages rates will start from 3.42 per cent.
ME, Bankwest and UBank’s mortgage rate cuts follow cuts from all of the big four banks and non-bank lenders Athena Home Loans, Homestar Finance and Reduce Home Loans.
“The banks have a lot of explaining to do,” Mr Frydenberg said.
“This is very disappointing by the banks, and customers should vote with their feet.”
The Treasurer encouraged borrowers to consider switching to alternative lenders with lower mortgage rates.
“Now, some of the smaller lenders have actually passed on this rate cut in [full],” he said.
“People should shop around, get the best deal, but also make their displeasure known to their banks because the rate cuts should be passed on in full, and that would be a good thing for consumers.”
[Related: ANZ, Westpac drop variable mortgage rates]