ME Bank has cut its three-year fixed home loan rate below 4%.
The non-major cut to its 3-year fixed Standard Home Loan by 40 basis points to 3.99%. It has also announced cuts on its 1-year and 5-year fixed rates, to 4.29% and 4.39% respectively.
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
“Even though the RBA
didn’t cut in April, customers can still get their rate cuts today – through a fixed loan,” he said. “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.”
This announcement comes after mutual lender Newcastle Permanent Building Society cut its three-year fixed rate home loan by 20 basis points to 3.99% at the end of March.