ME to raise basic variable rate for new investors by 0.4%

Industry super fund-owned bank ME will increase its basic variable home loan interest rate for new investor borrowers by 0.40% to 4.69% p.a. and its flexible home loan with member package interest rate for new investors by 0.36% to 4.89% p.a.

The changes come into effect 15 September 2015.

Rates across existing investor loans will also rise by 0.41%. 

Fixed rates for new owner occupied borrowers will fall between 0.09% and 0.50% across its 3 to 7 year terms, including its 3-year fixed rate falling 0.09% to 4.19% p.a. 

ME chief executive officer Jamie McPhee said the changes will benefit owner occupied borrowers particularly those seeking to buy their first home. 

“APRA introduced new regulatory measures to reinforce sound residential lending practices last December, including actions to restrict investor lending growth to no more than 10% p.a.

“The decision to increase investment rates was a difficult one, but after careful consideration we believe that combined with rate cuts across selected owner occupied home loans it strikes the right balance across our portfolio.”