Commonwealth Bank and ING change home loan interest rates

One of Australia's largest banks and ING are changing home loan rates. Image: Vitalii Tairov.

Borrowers are set for an interest rate shake-up today, with two banks deciding to slash variable home loan rates for new customers while also hiking some fixed rates.

Commonwealth Bank’s home loan changes

For the first time since September 2020, Commonwealth Bank reduced the interest rates on its variable home loans by up to 0.40 percentage points on Friday, with the biggest cuts going to new borrowers with larger deposits of at least 30% of a property’s value.

The bank also hiked most fixed rates by 0.10 percentage points, except for its shorter one-year fixed rates, which received cuts of up to 0.20 percentage points.

The changes take its variable rate Extra Home Loan down to 2.29% (2.30% comparison rate) for new borrowers with a loan-to-value ratio (LVR) of 70% and principal and interest repayments. Borrowers with an 80% LVR would pay 2.39% (2.40% comparison rate) on the same loan after the cuts.

CBA’s one-year fixed package loan received a 0.10 percentage point cut, down to 1.99% (4.10% comparison rate) for owner-occupiers paying principal and interest.

ING’s home loan changes

ING cut its variable interest rates for new owner-occupier and investor borrowers by up to 0.25 percentage points for those paying principal and interest.

The changes take ING’s Orange Advantage variable rate home loan with an offset account feature down to 2.29% (2.64% comparison rate) for owner-occupiers with loans above $150,000 and an LVR of 80% or less.

ING also increased most fixed rates for owner-occupiers by 0.05 to 0.20 percentage points, but left all one-year fixed home loan rates unchanged.

The bank’s new two-year fixed rate for owner-occupiers paying principal and interest with an LVR of 80% is 1.99% (3.75% comparison rate).

How do CBA’s and ING’s home loan rates compare?

The below list shows the cheapest owner-occupier home loan rates available for variable and fixed home loans at this time, according to Canstar’s database.

The average variable rate is 3.10%, for owner-occupiers paying principal and interest on a $500,000 loan and 80% LVR.

It could pay for borrowers to compare home loans, to see if they could be getting a better deal on their mortgage.

Lowest home loan rates on Canstar’s database

Variable: 1.77% (1.86% comparison rate), Reduce Home Loans’ Super Saver Variable 60% loan, maximum LVR of 60%
1-year fixed: 1.59% (2.15% comparison rate), Greater Bank’s Great Rate Discount Fixed 1 yr $150k+ loan, maximum LVR of 80%
2-year fixed: 1.59% (2.10% comparison rate), Greater Bank’s Great Rate Discount Fixed 2 yrs $150k+ loan, maximum LVR of 80%
3-year fixed: 1.79% (3.12% comparison rate), Community First Credit Union’s Accelerator Package Fixed P&I 3 yrs Special Offer loan, maximum LVR of 80%
4-year fixed: 2.15% (2.90% comparison rate), Illawarra Credit Union’s The Works Package Home Loan Fixed P&I 4 yrs Special Offer loan, maximum LVR of 95%
5-year fixed: 2.27% (2.05% comparison rate), Freedom Lend’s Freedom Fixed PI 5 yrs 70%, maximum LVR of 70%

Source: www.canstar.com.au – 15 October 2021. Based on owner-occupier home loans on Canstar’s database, available for a $500,000 loan amount, any LVR and principal and interest repayments; excluding introductory and first home buyer-only loans. Top rate selected based on lowest interest rate, followed by comparison rate. Comparison rate is calculated based on a $150,000 loan amount and 25-year loan term. Read the comparison rate warning.

This article was reviewed by our Sub Editor Tom Letts before it was updated, as part of our fact-checking process.

Ellie McLachlan

Former Content Lead

Ellie McLachlan is the former Content Lead at Canstar, helping to shape and deliver the content strategy. She specialises in covering mortgage and everday money topics and breaking finance news. An experienced journalist, Ellie has made her mark working in digital, broadcast and print media, serving in positions such as Editor at News Corp Australia's Compare Money and also News.com.au's Best Of Money, as Story Strategy Coach at the Australian Conservation Foundation, as a lifestyle reporter at The Urban List, The Courier Mail and The Sunshine Coast Daily, as well as radio presenter at 4ZZZ. While at Canstar, Ellie has written well over 500 finance articles and her work is regularly referenced by other publishers, including Business Insider, The Motley Fool and The New Daily. Her expert financial commentary has been featured in publications such as Yahoo Finance and the Herald Sun. Ellie studied a Bachelor of Journalism and Arts (Peace and Conflict Studies) at the University of Queensland. Follow Ellie on LinkedIn, Twitter, and Canstar on Facebook. Meet the Canstar Editorial Team.