ME Bank cuts three-year fixed to 4.99%

ME Bank has cut its three-year fixed standard home loan rate to 4.99% p.a. on both packaged and non-packaged loans.

It is the first lender to cut its three-year fixed home loan rate below 5% - other lenders have all cut their less popular two-year fixed-rate offerings.

The new rate is 40 basis points below the lowest major bank three-year fixed rate of 5.39% offered by NAB.

The new three-year fixed rate, available to eligible super fund and union members, is currently the lowest in the market and the lowest ME Bank has offered since becoming a bank in 2001. 

The offer is available for a limited time.

“Now is an excellent time to fix rates,” said Jamie McPhee, ME Bank chief executive. 

“With rates at 30-year lows and signs global economies are improving there is limited scope for the Reserve Bank of Australia (RBA) to make further rate reductions.” 

“Therefore fixed rates – usually a good indicator of the future RBA cash rate – may not get much cheaper.”

 “It won’t get much better than this.”

 “When considering their decision to fix, borrowers should also think in terms of personal circumstances.”

“Fixing is like insurance: if your current circumstances mean higher rates put you under stress then fixing can be an important strategy - the trade off is reduced flexibility and there may be costs if you decide to exit early.” 

Table  – Non-packaged three year fixed home loan rates. Source: Infochoice 20/02/2013.