ING and others continue the fixed mortgage squeeze

On Friday ING increased interest rates on a number of fixed-rate loans, and earlier in the week a number of other lenders did similar.

These increases come a day after NAB increased rates on fixed home loans.

One ING home loan was increased by 50 basis points - 0.50% or half a percentage point - and that went to the investment five year fixed loan paying principal & interest (P&I).

It is now 3.59% p.a. (4.31% p.a. comparison rate*).

A range of other home loan rates fixed between two and five years were also increased.

Some notable changes for owner occupiers included:

• Residential Fixed 2 Years 80%: 30 basis point increase to 2.59% p.a. (3.86% p.a. comparison rate*)
• Residential Fixed 3 Years 80%: 30 basis point increase to 2.99% p.a. (3.84% p.a. comparison rate*)
• Residential Fixed 4 Years 80%: 40 basis point increase to 3.29% p.a. (3.85% p.a. comparison rate*)
• Residential Fixed 5 Years 80%: 40 basis point increase to 3.49% p.a. (3.88% p.a. comparison rate*)

In September 2020, the four-year rate was as low as 2.09% p.a. (3.46% p.a. comparison rate*).

A 120 basis point difference on a $400,000 30-year home loan equates to $253 a month in extra interest paid.

And for investors:

• Investment Fixed 2 Years: 20 basis point increase to 2.69% p.a. (4.42% p.a. comparison rate*)
• Investment Fixed 3 Years: 40 basis point increase to 3.09% p.a. (4.35% p.a. comparison rate*)
• Investment Fixed 4 Years: 40 basis point increase to 3.39% p.a. (4.33% p.a. comparison rate*)

One notable feature of the latest spate of rate hikes is that one-year fixed-rate home loans were often left untouched or even reduced.

BCU increases

The Coffs Coast credit union increased rates on fixed-rate home loans, albeit at subtler increments.

Some noteworthy changes included:

• Residential Fixed P&I 3 Years: 10 basis point increase to 2.39% p.a. (3.63% p.a. comparison rate*)
• Residential Fixed P&I 5 Years: 15 basis point increase to 2.99% p.a. (3.63% p.a. comparison rate*)

Various investment home loans were also increased by similar increments.

IMB changes

While IMB increased rates on a few fixed-rate home loans, it also decreased rates on variable ones.

'Budget' and 'Essentials' variable-rate home loans for owner occupiers were decreased by 4 to 5 basis points.

Meanwhile, a couple of increases included:

• Investment Fixed P&I 3 Years: 19 basis point increase to 2.54% p.a. (3.37% p.a. comparison rate*)
• Investment Fixed P&I 5 Years: 19 basis point increase to 3.18% p.a. (3.49% p.a. comparison rate*)

These investment home loans have a maximum LVR of 90%

86 400 cuts

86 400 focused solely on rate cuts this week, namely to variable-rate investment home loans.

Home loans were decreased by between 15 and 25 basis points, and a couple of changes included:

• Own Home Loan P&I 80%: 20 basis point cut to 2.59% p.a. (2.87% p.a. comparison rate*)
• Neat Home Loan P&I 80%: 25 basis point cut to 2.34% p.a. (2.35% p.a. comparisonrate*)

The main point of difference between the 'Own' and 'Neat' products is that Own home loans come with an offset account.

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