Image Source: ING Group on Flickr
Image Source: ING Group on Flickr
Today, ING raised interest rates on many fixed home loans by up to 40 basis points, while also cutting some term deposit rates by 25 basis points.
The home loans to get the 40 basis point hike are interest-only (IO) loans:
- Investment Fixed IO 1 Year: Up to 3.29% p.a. (5.01% p.a. comparison rate*)
- Investment Fixed IO 5 Years: Up to 3.64% p.a. (4.69% p.a. comparison rate*)
Other fixed interest-only loans for both investors and owner-occupiers also saw a rate hike by between five and 40 basis points.
Loans paying principal and interest (P&I) also saw some raises to interest rates, including:
- Residential Fixed 1 Year: 15 basis point rise to 2.44% p.a. (3.97% p.a. comparison rate*)
- Residential Fixed 2 Years: 10 basis point rise to 2.29% p.a. (3.80% p.a. comparison rate*)
- Residential Fixed 3 Years: 20 basis point rise to 2.44% p.a. (3.70% p.a. comparison rate*)
Four and five-year fixed terms also saw interest rate rises, so too did the 'Orange Advantage' packaged loans fixed for between one and five years.
Term deposits also got some attention, with the three, six and nine-month term deposits being cut by 25 basis points - down to 0.85%, 1.05%, and 1.05% per annum respectively.
One-year and two-year term deposit interest rates were also cut by 25 basis points, each down to 1.15% p.a.
The news comes after NAB reduced some home loan interest rates yesterday.
Even with the hikes, ING is still comparable to other competitors in the fixed owner-occupier market paying P&I, as can be seen in the comparison table (below).
An ING spokesperson has been contacted for comment.
Base criteria of: a $400,000 loan amount, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the product provider’s web site. Introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term. Rates correct as at 01 July 2020. View disclaimer.
Westpac subsidiaries cut interest rates
St. George Bank and the Bank of Melbourne cut home loan interest rates by up to 25 basis points today.
The biggest cuts were to low LVR loans below 80%, requiring new mortgages or refinances to have a deposit of 20% or greater.
Both made cuts to the same products - primarily fixed loans. In the case of St. George Bank, some key changes are below:
- Residential Fixed IO 1 Year 60% LVR: 25 basis point cut to 3.74% p.a. (5.19% p.a. comparison rate*)
- Investment Fixed P&I 1 Year <60% LVR: 10 basis point cut to 2.94% p.a. (4.99% p.a. comparison rate*)
The lowest-rate home loan to see any sort of cut was to the Advantage Package Investment home loan, fixed for two years paying P&I with a maximum LVR of 60%.
This rate received a ten basis point cut to 2.59% p.a. (3.92% p.a. comparison rate*).
A multitude of other home loans were also cut, including packaged home loans, products paying P&I and products paying interest only, fixed anywhere from one to five years.
While the advertised rates look the same across the two banks, it's important to check with your lender on the comparison rate, as some differences could occur.
The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:
- The big four banks are: ANZ, CBA, NAB and Westpac
- The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
- The larger non-bank lenders are those who (in 2019) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.
In the interests of full disclosure, Savings.com.au and loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.
*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
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