Bank of Melbourne moves fixed rate peg

by BN22 Dec 2011

Bank of Melbourne has reduced fixed rates, only a week after offering to price match any other major.

The new Victorian Westpac brand's 3-year fixed rate now sits at 6.09% for its Advantage Package, while its 2-year fixed rate is priced at 5.99% and its 1-year fixed rate is 6.14%.

This is the seventh time the bank has cut rates since July, following the path of most lenders who have been responding to changes in their own pricing due to ongoing turmoil in Europe.

Bank of Melbourne CEO Scott Tanner said its 3-year rate is lower than the four major banks, and that now would be a good time for customers to fix their home loan, or split it and lock in a fixed rate portion.

Yesterday, Citibank's head of broker distribution Aaron Milburn said that the current fixed rate cutting cycle may be nearing an end, and that customers should look to fix in the near future.

Bank of Melbourne recently pledged to match the advertised price of any comparable product from the big four across its fixed and variable home loans, term deposits and some savings accounts. The promotion is to run through until the end of February, in an offer specific to the Bank of Melbourne brand.