ME Bank reduces principal-and-interest home loan rates
ME Bank is the latest lender to decrease principal-and-interest mortgage rates while hiking rates on interest-only borrowers.
The bank announced on Friday it would decrease its principal-and-interest variable home loan offer by 10 basis points for new owner-occupier borrowers who are applying for a loan in a member package valued at $150,000 or more and with an LVR at 80% or less.
It will also increase all interest-only variable and fixed home loan offers to new borrowers by 40 basis points.
The changes, which the bank attributes in response to regulatory requirements on interest-only lending, will come into effect tomorrow.
CEO Jamie McPhee says the changes "are necessary to ensure the bank complies with macro-prudential measures introduced by APRA, while encouraging existing interest-only home loan borrowers to switch to principal and interest".
"Owner-occupier principle-and-interest home loan rates are at record lows," he says. "Now is a great time to pay down the principal on your home loan."
He is encouraging customers to switch to owner-occupier principal-and-interest loans while rates are "at record lows".
McPhee says the bank does not charge customers a fee for switching their home loan from interest-only to principal and interest.
The changes come into effect from July 1.