FREQUENTLY ASKED QUESTIONS.

home loans.

Am I eligible to apply for a Home Loan with ME Bank?

Applicants must be:

  • 18+ years of age

    and
  • Be a member of an eligible super fund or union.

    and
     
  • A Permanent Resident or Australian or New Zealand citizen living in Australia 
    or
  • A Permanent Resident or Australian or New Zealand citizen living overseas with a Power of Attorney in favour of an Australian resident
    or
  • A Temporary Resident living in Australia with FIRB approval (conditions apply) 
    or
  • A Non-Permanent Resident or Non-Australian or New Zealand citizen living overseas with a Power of Attorney in favour of an Australian resident  and FIRB approval (conditions apply) 

 


How are interest rates set?

There are a range of factors banks consider when setting their lending rates.

One of the most influential of these is the ‘cash-rate’, which is set by the Reserve Bank of Australia (RBA). Part of the RBA’s role is to control inflation, economic growth and employment, and it does this by setting the ‘official cash rate’, which is the interest rate Australian banks are required to pay the RBA for short-term loans. When the RBA increases or decreases the ‘cash-rate’, retail banks typically pass this on to customers in the form of higher or lower lending rates.

Other factors include the interest rate banks pay savers for deposits and the amount they pay overseas and other financial institutions to borrow money. One final factor is profit motive. While many of the big banks are run purely to make profits for shareholders, other banks like ME Bank are set up to more fairly balance the demand for profit with the demand from customers for lower-cost products.

That’s why ME Bank has charged a lower standard variable rate for members of industry super funds and unions than all the Big Four banks since becoming a bank in 2001. 

 


Is my property suitable security for a home loan?

All residential properties must be deemed suitable by an approved valuer (appointed by ME Bank). We can arrange this for you. Properties under qualified title or old law may involve additional costs (i.e. conversion to Torrens title).

ME Bank cannot provide finance for all types of residential properties. To check whether your property is suitable security, contact one of our lending consultants on 13 15 63.

 


How much can I borrow?

You may borrow up to 95% of the purchase price or ME Bank’s valuation of the property - whichever is less. Minimum loan amounts start from $40,000 ($20,000 in Tasmania) and are subject to credit approval.

However, we don't want you to commit to something that could make your situation untenable, so the amount of your loan will depend on your income, financial commitments and ability to repay the loan.

Please note restrictions apply to amounts lent for some properties.

 


What are the loan terms for ME Bank home loans?

You can set up a loan for any period from 5 years up to 30 years. Over that period, your repayments are calculated so that you meet your monthly interest payment, as well as reduce the principal amount outstanding.


How can I make my loan repayments?

Your loan repayments must be made by direct debit from a nominated account. This account can be held with either ME Bank or any other Australian financial institution.

To set up a direct debit you can download and print the direct debit form and return it by mail to the address shown.

 


Can I make extra repayments?

If you choose a variable interest rate, you can elect to make lump sum payments or extra repayments at any time.

If you have a fixed interest rate facility (including as part of a split loan) settled on or after 9 June 2014, you may elect to make lump sum payments or extra repayments at any time into the fixed interest rate facility up to $30,000 during the fixed interest rate period. 


Are there any fees if I repay my loan early?

For variable rate loans, there are no additional charges for repaying the loan early after 5 years. However, if your loan was settled prior to 1 July 2011 and repaid within 5 years, we will charge $600 to recover loan set-up costs.

For fixed interest rate loans that are repaid before the end of the fixed interest rate period, there may be a fee if ME Bank incurs a loss from the termination. In this situation, the fee will not be greater than the loss incurred by ME Bank.

 


What are the costs?

To make life easier for everyone, ME Bank charges no application fees for home loans. However, some solicitor's fees, valuation fees and agent fees apply. For information on these fees and when they are charged, please see the relevant home loan product page.

Lenders Mortgage Insurance: Lenders mortgage insurance (LMI) is payable by you when the loan amount is greater than 80% of the property’s value. Our consultants can assist you to calculate this premium.

Property Insurance: Before settlement, you will need to arrange general purpose property insurance. Once your property has been valued, we'll let you know the minimum insurance coverage required.

Other: When purchasing a property, you may incur external costs and charges, such as legal advice, stamp duty and statutory government fees and charges.

If you would like some assistance in calculating these costs, contact one of our lending consultants on 13 15 63


What was the recent change announced by ME Bank in relation to fixed interest rate home loans?

We have listened to customer feedback and continue to improve our products.   From 9 June 2014, customers who take up new lending with a fixed interest rate term will be able to pay additional amounts into the facility up to a value of $30,000 during the course of the term without charge or penalty. 


Why was this change needed?

This provides you with more flexibility, allowing you to make additional repayments and benefit from the fixed interest rates on offer.


Who can access this new feature?

All customers who settle a new loan from 9 June 2014 will be able to use this new feature.   This includes existing customers who take up a new home loan.


Is the new feature applicable for any fixed interest rate term length?

The ability to prepay up to $30,000 is applicable across all fixed interest rate terms, including 1 year, 3 year and 5 years. 


I would like to split or fix my existing variable rate home loan. Can I take advantage of this new feature?

Customers with home loans settled before 9 June 2014 cannot take advantage of this new feature as their loan is subject to different Terms and Conditions. 


My letter of offer was issued before 9 June 2014, but I have not yet settled my home loan. Will I get this benefit?

If you settle your home loan on or after 9 June 2014, you will be able to take advantage of this feature.   You will receive new Terms and Conditions which will explain this change. 


Does this prepayment limit feature apply to all home loan products which have a fixed interest rate term?

Yes, it applies to all home loans with a fixed interest rate facility settled on or after 9 June 2014. 


Will my repayment amount be recalculated following any additional repayments?

No, as long as the additional payments are within the fixed interest rate term period and are $30,000 or less. 


Can I increase my regular repayments to take advantage of this new feature?

Yes. Any prepayment component will be considered as part of the $30,000 prepayment limit. For example, if your minimum required repayment is $200 per month, and you agree to pay $300, the additional $100 every month will count towards to your $30,000 prepayment limit. 


Can I redraw any part of the $30,000 prepaid?

You are not able to redraw from a fixed interest rate facility during the fixed rate period.  However  at the end of the fixed interest rate period, the facility becomes a variable rate facility and the prepaid amount will be available for redraw.