ME Bank hikes variable home loan interest rates
Another lender has increased variable home loan rates and there’s more hikes expected to come. Have you been impacted?
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Lender ME Bank is the latest financial institution to hike variable home loan rates.
The lender revealed late on Friday it was lifting mortgage rates by 0.18 percentage points for existing customers and comes just one day after ING announced rate increases.
ING, the country’s fifth-biggest bank, increased variable rates by 0.15 percentage for all existing home loan customers.
Both lenders will implement the hikes from Thursday, February 7.
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ME, owned by the industry super funds, in an issued statement blamed the increased cost of funding.
“It was a difficult decision but we have sought the right balance between delivering a strong customers value proposition across our product range while responding to the sustained increase in funding costs,” ME’s chief executive officer Jamie McPhee said.
The move also follows behind National Australia Bank who last week revealed it was increasing variable home loan rates, also blaming the rising cost of funding.
NAB’s increase started on Thursday — their standard variable rate rose 0.12 percentage points to 5.36 per cent.
Financial comparison website RateCity spokeswoman Sally Tindall said ME’s move was “yet another cab off the rank.”
“We are expecting to see many other banks to follow suit over the next few months and hike rates,” she said.
“What’s interesting here is that ME has decided to charge their existing customers more than new ones.”
For existing ME customers with $300,000 30-year home loan paying 3.84 per cent — this is ME’s discounted variable rate — it will rise to 4.02 per cent.
This will increase monthly repayments from $1405 to $1436 — a rise of $31 per month.
Interestingly ME is only hiking rates for new customers by 0.08 percentage points.
Ms Tindall said some loyal customers will think it’s unfair to pay more than new customers.
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