ME Bank has cut its three-year fixed standard home loan rate from 4.69 to 4.59 per cent.
This is the lowest three-year standard rate the lender has offered since it became a bank in 2001.
ME Bank said its three-year rate was now “significantly lower than the majors” and that its low pricing had helped it win a greater share of the fixed-rate market.
ME Bank undercut the majors last month by reducing its five-year rate to 4.94 per cent. It has also made further cuts to its one-year, three-year and five-year rates since March.
National manager of brokers Stewart Saunders told The Adviser that ME Bank has gained “significant market share” of the fixed-rate market in recent years by out-pricing other banks.
“For instance, AFG’s Competition Index, which tracks bank share of the mortgages AFG processes, shows ME Bank has significantly increased its share of AFG’s mortgages,” he said.
“ME Bank’s fixed loans rose to 10.3 per cent of all mortgages processed by AFG in June from 1 per cent in July 2013.”
Mr Saunders also said ME Bank valued broker feedback and had made improvements to resourcing and processes over the past 12 months.
“The bank will continue to listen and introduce changes, supported by a $70 million technology transformation project that will significantly improve the efficiency of the bank’s operations,” he said.
ME Bank chief executive Jamie McPhee said now was a great time for borrowers to fix their home loans.
“We’re either at or very close to the bottom of the current interest rate cycle. The next Reserve Bank rate change is likely to be an increase of 25 basis points in the first half of 2015,” he said.