Canstar has noticed home loan rates continue to fall at the major banks and a range of other lenders, following not one, but two cash rate cuts by the Reserve Bank of Australia in March, which were undertaken in an attempt to curb the economic impacts of the coronavirus pandemic.
With the cash rate now at an unprecedented low of 0.25%, the interest rates lenders charge their home loan customers are trending lower as well.
In fact, moves by ING announced on Wednesday mean the bank will offer market-leading home loan interest rates on all its fixed-term loans, having slashed up to 0.50 percentage points off them.
The new rates at ING will be effective from tomorrow, 26 March 2020, across a range of fixed-rate home loans for new and existing owner-occupier and investor borrowers, while variable interest rates will remain unchanged.
The changes will bring ING’s lowest owner-occupier interest rate down to a fixed rate of 2.09% (comparison rate 3.77%) for two years, for new and existing customers paying principal and interest on an Orange Advantage home loan. The Orange Advantage loan is a variable rate home loan with a 100% mortgage offset account, that can be combined with a fixed rate loan to make a split-rate product.
The lowest fixed rate on offer for ING’s investor customers will now be 2.64% (comparison rate 4.41%) for those who pay principal and interest and fix for two years.
Canstar finance expert Steve Mickenbecker said competition was heating up in the fixed rate space, with ING now following the big four banks’ move last week to cut fixed rates further after the RBA’s emergency cash rate cut.
“Fixed rates will be at the front line as the banks set out to entice Australians to use their time at home to consider refinancing their home loans to lower rates,” Mr Mickenbecker said.
“Low fixed rates give consumers opportunities to lock in their repayments at all-time low interest rates.”
The new rates at ING will be as follows:
Owner-occupiers paying principal and interest:
- 1-year fixed rate cut by 0.45 percentage points, to 2.29% (3.96% comparison rate)
- 2-year fixed rate cut by 0.50 percentage points, to 2.19% (3.79% comparison rate)
- 3-year fixed rate cut by 0.35 percentage points, to 2.24% (3.65% comparison rate)
- 4-year fixed rate cut by 0.25 percentage points, to 2.59% (3.63% comparison rate)
- 5-year fixed rate cut by 0.20 percentage points, to 2.64% (3.54% comparison rate)
Home loan rates are moving fast. How does yours compare?
Owner-occupiers paying principal and interest with Orange Advantage:
- 1-year fixed rate cut by 0.45 percentage points, to 2.19% (3.95% comparison rate)
- 2-year fixed rate cut by 0.50 percentage points, to 2.09% (3.77% comparison rate)
- 3-year fixed rate cut by 0.35 percentage points, to 2.14% (3.62% comparison rate)
- 4-year fixed rate cut by 0.25 percentage points, to 2.49% (3.59% comparison rate)
- 5-year fixed rate cut by 0.20 percentage points, to 2.54% (3.50% comparison rate)
Investors paying principal and interest:
- 1-year fixed rate cut by 0.15 percentage points, to 2.74% (4.60% comparison rate)
- 2-year fixed rate cut by 0.20 percentage points, to 2.64% (4.41% comparison rate)
- 3-year fixed rate cut by 0.05 percentage points, to 2.69% (4.25% comparison rate)
- 4-year fixed rate cut by 0.05 percentage points, to 3.04% (4.18% comparison rate)
- 5-year fixed rate cut by 0.10 percentage points, to 3.09% (4.03% comparison rate)
Investors paying interest-only:
- 1-year fixed rate cut by 0.15 percentage points, to 2.89% (4.99% comparison rate)
- 2-year fixed rate cut by 0.20 percentage points, to 2.79% (4.83% comparison rate)
- 3-year fixed rate cut by 0.05 percentage points, to 2.84% (4.70% comparison rate)
- 4-year fixed rate cut by 0.05 percentage points, to 3.19% (4.66% comparison rate)
- 5-year fixed rate cut by 0.10 percentage points, to 3.24% (4.57% comparison rate)
If you’re currently considering a home loan, the comparison table below displays some of the variable rate home loans on our database with links to lenders’ websites that are available for first home buyers. This table is sorted by Star Rating (highest to lowest), followed by comparison rate (lowest-highest). Products shown are principal and interest home loans available for a loan amount of $350K in NSW with an LVR of 80% of the property value and that offer an offset account. Before committing to a particular home loan product, check upfront with your lender and read the applicable loan documentation to confirm whether the terms of the loan meet your needs and repayment capacity. Use Canstar’s home loan selector to view a wider range of home loan products.
*Comparison rate based on loan amount of $150,000 and a term of 25 years. Read the Comparison Rate Warning
At the same time, ING has made 0.25 percentage point increases to its six-month, nine-month, one-year and two-year term deposit rates, up to a maximum of 1.85% for the one-year and two-year rates. Like the home loan rate cuts, these increases will also take effect tomorrow, 26 March 2020.
The bank said it was introducing the lower fixed rates and higher deposit rates to help customers and small businesses impacted by coronavirus. Other measures announced by ING include loan repayment deferrals for up to six months, including for home loans, personal loans and credit cards.
Smaller lender Tic:Toc also announced some home loan rate cuts today, now offering fixed rates as low as 2.22% across its one, two and three-year fixed terms for owner-occupiers paying principal and interest (comparison rates 2.66%, 2.62% and 2.58% respectively).
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