Last Friday, ME Bank announced several changes across its home loan portfolio.
The Melbourne-based bank decreased by 10 basis points its principal-and-interest variable home loan offer to new owner-occupier borrowers who’re applying for a loan in a member package valued at $150,000 or more, and with an LVR at 80% or less.
It also increased all interest-only variable and fixed home loan offers to new borrowers by 40 basis points.
Both these changes took effect on July 1.
ME Bank will also increase by 40 basis points its reference rates on all existing variable interest-only loans. This change will impact existing customers in August.
ME said the changes were rolled out to reinforce compliance with the Australian Prudential Regulation Authority’s latest requirements on interest-only lending.
“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,” said Jamie McPhee, CEO at ME Bank. “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.”
The bank does not apply a fee for switching from interest-only to principal and interest, he added.
Collections: Mortgage News