BoQ and ME Bank first to cut rates

07/12/2011

Bank of Queensland and ME Bank both announced cuts of 25 bps. These were the only rate reductions publicised late yesterday after the RBA announced a 25 bps cut in the official cash rate.

BoQ's cut, to 7.36 per cent, will apply from 16 December. ME Bank said its new standard home-loan rate will be 6.74 per cent, but it has yet to set the date from which this will apply.

Typical home-loan rates from lenders, which take into account advertised and less formal discounts from the "standard" rates, fall somewhere between the new pricing points of BoQ and ME Bank.

Between them, the two banks account for around three per cent of the home-loan market. The major banks account for more than 80 per cent of the market, and closer to 90 per cent when measured by new business.

Both BoQ and ME Bank are looking for a lift in new business levels. BoQ's home loan growth over the last few months has been around half overall home-loan credit growth, while ME Bank has seen its mortgage book decline in dollar terms over the last year.

Source: Banking Day