Second tier touts rate cuts, discounts

by Adam Smith18 Jun 2012

Fixed rates continue to fall as a second-tier has made further cuts.

Bank of Melbourne has cut its three-year fixed rate to 5.79% under the bank's Advantage Package. The bank has also launched a promotion to pay up to $700 toward switching costs on the Advantage Package if customers switch a loan of $250,000 or more from another lender by 31 July.

Bank of Melbourne chief executive Scott Tanner said, in spite of numerous RBA cuts, fixed rates remained popular among borrowers.

"People are looking for clarity at the moment. More customers are talking to us about fixing all or part of their home loan to help manage their finances and gain greater certainty in these uncertain times," he said.

For borrowers who apply between 19 June and 31 July, he bank will also offer an increased life-of-loan discount of up to 0.9% off new standard variable home loans of amounts more than $500,000, or 0.85% for loan amounts between $250,000 to $500,000.