ME Bank Mortgage Review - Is ME a good fit for you?

ME Bank may be a smaller bank and a new kid on the block when compared to the other well-established operators. But with the backing of the Bank of Queensland and functioning as a fully online bank... They have the ability to provide some competitive offers across their financial products.

In this article, we’ll be doing a home loan review for ME Bank to see how they stack up. We’ll look into:

• Who is Me Bank and what they can offer you?
• What type of home loan products do they provide?
• Who is eligible for a home loan with ME Bank?
• What their home loan application process is like?
• The pros and cons of ME Bank and if they’re a suitable option for you and your needs.

Are you an Australian in the market for a property or are looking to refinance? Then read on to see if ME Bank’s home loans are the right for you.

Who Are ME Bank and What Are The Benefits of Banking With Them?

ME Bank was founded in Melbourne in 1994, and technically, its name stands for Members Equity Bank. However, ME Bank is no longer run as a mutual bank. While ME Bank was previously under the ownership of a superannuation fund consortium, it is now fully owned by the Bank of Queensland (BoQ) and will be sitting on top of BOQ's banking license. It looks like ME Bank will continue as a 'brand' in the market, though.

ME Bank used to have branches across Australia. But now it operates as an online bank with phone and email customer service channels as well.

Providing their financial services online allows ME Bank to avoid the types of overheads the more traditional brick-and-mortar operations have. ME Bank delivers the competitive interest rates and low to no-fee options available from similar online operations such as Athena, UBank, and ING.

ME Bank is well-known for the following types of competitive financial products:

• An everyday transaction account with no account keeping fees and Australian ATM rebates.
• Low-interest rate home loans.
• A high-interest rate online savings account with no fees.

They also offer term deposits, credit cards, and personal loans.

Borrowers can have some reservations about banking with a smaller outfit, due to concerns surrounding guarantees for their funds. This means most borrowers tend to go with the big guys like ANZ, Westpac, Commonwealth Bank, and NAB.

But there is no need to worry. ME Bank is backed by BoQ and the Australian Government’s Financial Claims Scheme.

What Types of Home Loan Products Do ME Bank Provide?

Currently, ME Bank offers 3 home loan types for both owner-occupied buyers and property investors:

• Flexible Home Loan - Available as a variable, fixed, or split rate home loan.
• Flexible Home Loan + Member Package - Available as a variable, fixed, or split rate home loan.
• Basic Home Loan - Available as a variable rate home loan.

Let’s get down to brass tacks and explore the features and benefits.

Flexible Home Loan

Here’s what you can expect with ME Bank’s Flexible Home Loan:

• A no-fee redraw facility with a $500 minimum.
• You have the option of a variable rate, a fixed rate for a period from 1 to 7 years, or you can choose a split rate loan to get the best of both worlds.
• You can get a 100% offset account and pay off your loan faster.
• With the variable rate option, you’ll be able to pay off your home loan sooner with no penalty.
• If there are any guarantees in life, it’s that the unexpected will happen. ME Bank offers the option to have a loan repayment holiday to get back on your feet.
• There’s a 5-year interest-only payment option. And for investors, it’s 10 years.

Flexible Home Loan + Member Package

This is ME Bank’s most popular home loan option. It’s similar in nature to the professional packages that other banks have on offer. A professional package is when a bank bundles together with other financial products and deals.

This loan is an award-winning deal. It took home the 2022 Mozo Expert’s Choice Award for packaged home loans.

You’ll get everything mentioned above under Flexible Home Loan, with the addition of these perks:

• You’ll save $200 with no valuation fee.
• Access to lower variable interest rates and lower fixed interest rates.
• Zero top-up fees.

To access the member package, you’ll have to pay an annual fee of $350.

Basic Home Loan

Are you after a low-rate home loan with no annual fee? Do you have no need for all the bell and whistles of the member package? Then the Basic Home Loan option could be the way to go for you.

It’s an award winner too. ME Bank’s Basic Home Loan took home the 2021 Money Magazine Best of the Best Award.

Here’s what you’ll get:

• Competitive low variable interest rate.
• No annual fees, or monthly fees. And no application fee.
• No fee redraw facility with a minimum of $500.
• You can pay your home loan off early with no penalty.

Am I Eligible For A ME Bank Home Loan?

To be eligible for a ME Bank home loan, you’ll need to meet the following criteria:

• An Australian citizen or permanent resident.
• Have a regular, stable income and have the ability to service the loan.
• Have a 20% deposit as they offer a maximum of 80% loan-to-value ratio (LVR). This is applicable to most of their home loan products. They do offer some limited options for those with lower deposits.
• A credit history with no bankruptcy declaration.

With these eligibility criteria, ME Bank home loans won’t be suitable for everyone. To review if ME Bank could lend to you, build out your YouBroker profile and put yourself in the driver's seat to find out your borrowing options with ME Bank. Once you have a YouBroker profile set up, you can run calculations, save your progress, and get customised and personal broker support on your actual situation, including what rates and borrowing power you have.

What Is The ME Bank Home Loan Application Process Like?

You can apply for a ME Bank home loan online, over the phone, or with a mortgage broker, like YouBroker. In order to have your application assessed, you’ll need to supply the following documentation:

• The Contract of Sale for the property. You can apply before you get to this stage, but you’ll need this to complete the application.
• Verification of your identity. Generally, the following documents are accepted: passport, driver’s licence, Medicare card, and birth certificate.
  During the Covid-19 pandemic, ME Bank pioneered a video ID verification process to adhere to social distancing restrictions.
• Proof of your income such as recent payslips (usually 2 of your most current payslips) and/or PAYG summaries.
• If you’re self-employed, your proof of income documentation will be more involved. At a minimum, you’ll need to provide 2 years’ worth of up-to-date tax documents, such as Notice of Assessments.
• Documentation proving your assets and liabilities. This includes statements for your savings accounts, transaction accounts, credit cards, loans, and other debts and assets you have.
• Pre-approval is available across ME Bank home loans. When you’re looking for a new home, pre-approvals can assist with knowing what is in your budget in relation to your financial situation.

ME Bank Home Loans - The Pros and Cons

A mortgage with an online bank like ME Bank won’t suit everyone. Having a fully online approach to banking and streamlined financial products can limit eligibility for some folks.

So, let’s break down the pros and cons of a ME Bank home loan to see if they’re a good fit for you and your individual needs.

The Pros

• Highly competitive Interest rates for both variable-rate and fixed-rate home loans.
• They are accommodating of self-employed home loan applications. But you may need to jump through some hoops when it comes to documentation.
• They tend to have more generous borrowing power, so if you need a bit more stretch in borrowing power, they can be a good fit (build your YouBroker profile so we can work out an exact $ dollar borrowing power for you).
• They are a pretty funky brand, and try to have a more approachable and young vibe.
• They work with mortgage brokers, like YouBroker, so we can guide you if ME Bank really is the best option for you.
• They’ll accept video verification of your identification to adapt to pandemic restrictions.
• They offer discounted lenders mortgage insurance (LMI) to first-home buyers.
• They offer construction loans and can lend up to 90% LVR (depending on your financial situation).
• Looking to refinance? ME Bank may be a great choice for you. They’ll refinance your owner-occupied loan up to 95% LVR (LMI inclusive).
• They’ll consider 90% LVR for the purchase of display homes.
• They can approve home loan applicants who are on maternity leave.
• They offer student accommodation mortgages.
• 100% overtime income for essential professions (such as nurses, doctors, emergency services, and defence force employees, to name a few). They may also accept 80% overtime income for those not in essential professions.
• 100% offset account and free redraw options available.

The Cons

• If you’re after lightning-quick turnaround times then ME Bank may not be for you. They have experienced criticisms for their less efficient systems and delays. This can potentially cause you to miss out on your dream home if the timing doesn’t line up. It's best to allow 4-7 days for a full response back from ME Bank.
• Depending on how busy ME Bank is, First home buyers and purchasers who need a fully assessed AIP (Approval In Principle or Pre-Approval) will need an exception to have the application fully assessed. This is often not an issue, just something that we bear in mind when you are being approved. At YouBroker, we request ME Bank AIPs and Pre-Approvals to be fully assessed, which reduces the risk to the customer.
• After an initially good rate (say a good 2-year fixed rate), they do always tend to move rates up on their customers and tend to be hard to negotiate down to a better rate.
• They’re generally a less suitable option for those with a bad credit history or more complex home loan applications. If this is you, opting to work with a mortgage broker (such as YouBroker) may be the way to go. They can give you the low down on what you’ll need to apply and who are the better lenders to approach.
• If you have a smaller deposit then you’ll most likely have to pay a higher interest rate.

Disclaimer: All the above information was correct at the time of publishing. Banks and lenders may change their offerings and policies. To make sure you’ve got all the up-to-date info and an insider edge, contact YouBroker for help with your home loan needs.

The Wrap Up

If you’re eligible for a ME Bank home loan, you could get access to low rates, great deals and have the ability to pay off your home loan sooner without incurring a penalty. ME Bank’s award-winning home loans offer the type of competitive rates and perks that the Big 4 banks struggle to meet.

However, to get access to those good rates you’ll potentially need a pretty sizeable deposit and clear credit history. And if you know that your home loan application will be a more complex affair, then ME Bank may not be the right fit for you.

Also, their delayed response times may interfere with the real estate buying process. That could end up costing you the home of your dreams if you don’t monitor the process carefully.

If you’d like some advice about applying for a ME Bank home loan, complex home loan applications, or the real estate buying process, you can contact a reputable mortgage broker, like YouBroker. We can help you along your home buying journey.

If you’d like to see information on lifestyle, real estate, and finance, check out YouBroker’s articles here: https://youbroker.com.au/articles/

Want to know if ME Bank is your best home loan?

When you are looking for control of your finances, and home loan, you need YouBroker on your side. YouBroker can help you navigate home loan applications and everything in-between. We take the guesswork out of getting approved and can help you through the whole real estate buying or refinancing process.

We can work out how much you can borrow, and figure out your best mortgage options with lender home loan rate comparisons and even contact 2-3 banks for custom pricing discounts for your situation.

Our service includes helping you understand the following:

• Your funding position, which shows key components such as Stamp Duty, the loan amount, and your downpayment or equity.
• Your property scenario, what you can afford, or what the official value of your property is.
• Completing a living expenses declaration, easily and with accuracy.
• Which home loan products and providers offer you the right fit, including shortlisting rates and banks you are most interested in.

Interested in having the hassle taken out of the ME Bank mortgage process? You can get started on completing a YouBroker profile, which allows you to save your personal financial information, complete ID checks, get your expenses filled in accurately and automatically, and see real rate options from Banks including ME Bank, Suncorp, ING Bank, St George, Commonwealth Bank and more.