Three banks have joined the fixed rate cutting trend as wholesale funding cost pressures ease.
ME has announced rate cuts of up to 26 basis points across its fixed mortgage product range.
Effective from Wednesday (15 May), the new reduced rates for Flexible Home Loans with a Member Package are:
The non-major bank also announced new variable rates for its Flexible Home Loans with a Member Package for new customers.
The new decreased variable rate for owner-occupied P&I loans between $400,000 to $700,000, as well as loans over $700,000, with an LVR of up to 80 per cent is 3.79 per cent p.a. (up from 3.82 per cent p.a.).
For investment P&I loans between $150,000 and $400,000, between $400,000 and $700,000, and more than $700,000, with an LVR of up to 80 per cent, the variable rate has been reduced by 10 basis points to 4.17 per cent p.a.
UBank, a subsidiary of National Australia Bank, also slashed its fixed rates on owner-occupied and investment loans by up to 30 basis points.
Effective from Friday (17 May), UBank’s newly reduced fixed rates for mortgages are:
Commenting on the rate cuts, Rate City research director Sally Tindall said it’s good to see competition in the mortgage market heat up.
“The big four banks have all cut their fixed rates in recent weeks forcing smaller lenders like ME and UBank to follow suit to stay in the game,” Ms Tindall said.
“We’re likely to see more lenders drop their fixed rates in coming weeks, particularly as speculation of an RBA rate cut mounts.”
Bankwest has also joined the fixed rate cutting trend, announcing changes of up to 50 basis points.
The new rates for the CBA-owned bank are:
ME, UBank and Bankwest are among a long line of lenders – including Teachers Mutual Bank, ING, NAB, Virgin Money, Heritage Bank, Westpac, Commonwealth Bank, Bendigo Bank, Macquarie Bank, HomeStart Finance, Bluebay Home Loans and Adelaide Bank – to slash their fixed rates on home loans in recent months.
Many lenders have succumbed to such cost pressures and hiked their variable mortgage rates throughout 2018 and earlier this year, despite monetary policy inertia from the Reserve Bank of Australia, which kept its official cash rate on hold in May, contrary to predictions.
[Related: Major bank broker flows diverge]
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