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A non-major bank has announced a new variable rate for owner-occupiers that is only available for a limited time but will apply for the life of the loan.
Industry super fund-owned bank ME today announced the variable rate for Flexible Home Loans (with Member Package), for new owner-occupier loans.
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For a limited time, ME will offer a 4.19 per cent variable rate. In a statement today, the bank said that the “cherry on top” is the discount will apply for the life of the loan.
ME general manager broker sales Lino Pelaccia said the offer will help ME compete in the owner-occupier lending space, which has heated up in recent months following changes to investor pricing.
“Our Flexible Home Loan (with Member Package) is now positioned as one of the best in market, and is timed perfectly as buyers get stuck into the spring buying season,” Mr Pelaccia said.
“Savvy borrowers also have the option to split both our variable and three-year fixed rate of 4.19 per cent per annum into one sweet rate combination.”
The offer is available for owner-occupiers who apply from 1 October and settle with 90 days of the promotion’s closure.
ME’s new rate offer is further evidence of the strong competition in the owner-occupied space in the current two-tiered mortgage market.
Mortgage Choice chief executive John Flavell said many lenders were starting to offer some “very competitive” owner-occupied home loans in a bid to pick up more of this business.
“Over the past few months, many of Australia’s lenders have made significant changes to their investment product pricing and policy in a bid to curb their level of investment lending growth,” Mr Flavell said.
“But just because many of Australia’s lenders are actively trying to reduce their level of investment activity, doesn’t mean they are not hungry for business – quite the opposite.
“Australia’s lenders are just as hungry for business as they ever were and because APRA has told them to limit their level of investment lending growth, the lenders have been forced to turn their attention to owner-occupiers.”
Mr Flavell observed that many of Australia’s lenders are currently offering owner-occupied borrowers a raft of incentives, including interest rate discounts, cashback offers and fee waivers.
Last month, ME announced a $1,250 cashback offer for new customers. The offer, which has since expired, was available to all owner-occupiers who applied from 8 September to 2 October 2015.
[Related: ME announces cashback offer]
