Home loans hit record lows as competition hots up and banks price in future rate cuts

13 April 2015

Home loan rates are falling below 4% as continued low credit growth and record low swap rates create a perfect fixed rate environment.

ME Bank on Monday cut its 3-year fixed Standard Home Loan by 40 basis points to 3.99% p.a.* (4.84% comparison rate)#, its 1-year to 4.29% p.a.* (5.06% comparison rate)# and its 5-year to 4.39% p.a.* (4.84% comparison rate)#.

Patrick Nolan, head of home loans at ME Bank, said record low rates were possible because money markets – where banks buy their fixed funding – were already pricing in two more RBA rate cuts.

“Even though the RBA didn’t cut in April, customers can still get their rate cuts today – through a fixed loan.

“With competition hotting up, many Banks will pass these fixed rate savings directly on to customers.”

“Banks are fighting over a smaller slice of the lending pie which is helping to push fixed rates to never before seen lows.

Nolan said more banks were also introducing greater flexibility into their fixed loans to increase appeal.

“We now let new customers pay an extra $30,000 over their fixed term – which is an average of over $830 a month in extra repayments on a 3 year fixed term.

“Banks are working harder than ever before to win new customers.” 

 

Fixed term

New standard rate % p.a.

Reduced by

1 year

4.29%* (5.06% comparison rate)#

0.40 basis points

3 year

3.99%* (4.84% comparison rate) #

0.29 basis points

5 year

4.39%* (4.84% comparison rate) #

0.20 basis points

 

- Ends -

 

 

*Interest rates current as at 13/04/2015 and are subject to change.

 

#Comparison Rates based on a loan of $150,000 for a term of 25 years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

 

Terms, conditions, fees and charges apply. Applications are subject to credit approval.

 

Members Equity Bank Limited ABN 56 070 887 679 Australian Credit Licence 229500.

 

MATTHEW READ, MEDIA AND COMMUNICATION MANAGER

P 03 9708 3334 M 0432 130 338 Email

ME Bank is the only bank which is 100 per cent owned by Australia’s leading industry super funds. ME Bank provides industry super fund, union and employer association members with a genuinely fairer banking alternative.