ING raises home loans rates by up to 40bps, slashes term deposits

author-avatar By on June 19, 2020
ING raises home loans rates by up to 40bps, slashes term deposits

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*)

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval
FixedMore details
ONLY A 5% DEPOSIT REQUIRED

Fixed Rate Home Loan (Principal and Interest) 2 Years

ONLY A 5% DEPOSIT REQUIRED
FixedMore details
NO UPFRONT OR ONGOING FEES

Basic Home Loan Fixed (Principal and Interest) (LVR < 70%) 3 Years

NO UPFRONT OR ONGOING FEES
FixedMore details
ONLY A 5% DEPOSIT REQUIRED

Fixed Rate Home Loan (Principal and Interest) 3 Years

ONLY A 5% DEPOSIT REQUIRED

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of September 25, 2021. View disclaimer.

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.

However, lenders raising some home loan interest rates is nothing new - last week Newcastle Permanent did so, and in recent weeks both ANZ and ME Bank did as well.

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.

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.


Disclaimers

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 2020. They are (in descending order): Great Southern Bank, 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 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

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, Performance Drive 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.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison is passionate about breaking down complex financial topics for the everyday consumer.

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