ME Bank moves home loan rates

ME Bank will decrease its principal-and-interest variable home loan offer by 10 basis points.

This reduction will be available to new owner-occupier borrowers who are applying for a loan in a member package valued at $150,000 or more and with an LVR at 80% or less.

All interest-only vairable and fixed home loan offers to new borrowers will increase by 40 basis points.

Both these changes are effective July 1.

In August ME will increase its reference rates on all existing variable interest-only loans by 40 basis points

The bank said the changes were being made to manage regulatory requirements on interest-only lending.

ME CEO Jamie McPhee, said the changes are necessary to ensure the Bank complies with macro-prudential measures introduced by APRA, while encouraging existing interest-only home loan borrowers to switch to principal-and-interest.

“Owner-occupier principle-and-interest home loan rates are at record lows.

"Now is a great time to pay down the principal on your home loan.

“ME does not apply a fee for switching from interest only to principal-and-interest.”