Industry super fund-owned bank ME today announced changes to its variable and fixed home loan interest rates for investor and selected owner occupied loans.
Effective 15 September, ME’s Basic Variable home loan interest rate for new investor borrowers will rise by 40 basis points to 4.69 per cent and its Flexible home loan with member package interest rate for new investor borrowers will increase by 0.36 per cent to 4.89 per cent.
Rates across existing investor loans will also rise by 0.41 per cent.
Fixed rates for new owner occupied borrowers will fall between 0.09 per cent and 0.50 per cent across its 3 to 7 year terms, including its 3-year fixed rate falling 0.09 per cent to 4.19 per cent.
ME CEO Jamie McPhee said the changes have been precipitated by major shifts in the banking industry that have forced banks including ME to review their lending practices and pricing.
“APRA introduced new regulatory measures to reinforce sound residential lending practices last December, including actions to restrict investor lending growth to no more than 10 per cent per annum,” Mr McPhee said.
“The changes we have announced today will advantage owner occupied borrowers particularly those seeking to buy their first home,” he said.
“The decision to increase investment rates was a difficult one, but after careful consideration we believe that combined with rate cuts across selected owner occupied home loans it strikes the right balance across our portfolio.”
[Related: Bank raises investor home loan rates]