ME Bank is the latest lender to cut variable home loan rates, joining Macquarie, ANZ, AMP and Bendigo Bank in offering lower variable rates to owner-occupiers and investors.
Last week, ME cut its principal and interest variable mortgage rate for owner-occupiers by 8 basis points, taking it to 3.79 per cent. It cut its P&I variable rate for investors by 10 bps, taking it to 4.17 per cent.
It cut its three-year fixed rate for owner-occupiers by 21 bps to 3.58 per cent, and its two-year rate for investors by 26 bps to 3.88 per cent.
Lenders are cutting rates to maintain market share in a weak home loan market. Until recently the focus of that activity was fixed rates, but that is changing.
Last week, Macquarie Bank cut variable rates for owner-occupiers by between seven and 21 basis points, and variable rates for investors by up to 51 bps. Macquarie cut fixed rates by up to 20 bps. ANZ cut a wide range of fixed rates by up to 60bps.
Last month, ANZ cut the discount on its Simplicity Plus principal and interest rate for new loans with loan to valuation ratios below low 80 per cent. In effect, it cut the rate by 37 basis points to 4.09 per cent.
Also last month, AMP cut its variable rate for new borrowers to 3.79 per cent. The lower rate applies to owner occupiers taking out principal and interest loans between $500,000 and $750,000.
And Bendigo Bank cut its basic variable rate for owner occupiers paying principal and interest by 49 bps, from 4.28 per cent to 3.79 per cent.
The direction of variable rates is not all down. RateCity reported that Greater Bank went against the trend, increasing all its variable rates by 10 bps.
In the fixed rate market, one notable move was Bankwest cutting its three-year owner-occupier rate was cut by 50 basis points. It is now the lowest three-year rate in the market at, at 3.48 per cent. Its three-year investor rate was cut 20 bps to 3.88 per cent.