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The mutual bank has passed on the full 25bps cut from the RBA to its variable mortgage rate customers.
Teachers Mutual Bank Limited has announced that it will apply a rate cut of 25bps to its Flexi Choice variable rate home loan with principal and interest repayments as well as a cut of 25bps to its My First Home Loan variable rate with principal and interest repayments for existing borrowers.
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The changes, which will be applied across all of the group’s brands (Teachers Mutual Bank, UniBank, Health Professionals Bank and Firefighters Mutual Bank), will be effective for new business from 25 June, while existing customers will receive the reduction from 1 July.
“These will make our rates some of the most competitive in the market. In tandem with our 100 per cent mortgage offset facility, these rates represent great value for our members,” Steve James, CEO of TMB, said following the announcement.
“We need to balance the interests of depositors, savers alongside our operational costs in rate decisions.
“On this occasion, we believe passing on the recent cash rate cut in full is a good outcome for our members overall.”
TMB is the latest of several lenders to reduce its mortgage rates following the Reserve Bank of Australia’s (RBA) decision to cut the official cash rate to a new record low of 1.25 per cent.
Last week, the lender also announced that it has extended its Classic Home Loan offering to investors, effective for new business and external refinances from 18 June.
The home loan is priced with a variable rate of 3.67 per cent and will be available to investors paying principal and interest on loans valued from $150,000 to $1 million.
The offering enables borrowers to take out a loan with an LVR of up to 85 per cent – prior to the capitalisation of LMI.
In a statement to The Adviser’s sister publication, Mortgage Business, TMB’s head of third party distribution, Mark Middleton, said the product is predominately targeted towards first home buyers (FHBs) within its membership base.
“The Investor Classic Home Loan provides borrowers with a competitive investment product,” he said.
“We see this option as a great opportunity for young professionals who are entering the housing market to take advantage of our low investor rate on offer.
“We believe this may be a popular option for our main key worker markets in the education, emergency services and health sectors.”
[Related: HomeStart announces mortgage rate cut]
