ING to raise fixed home loan interest rates in 'surprise' move

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ING no longer leads the race in offering some of the lowest and equal-lowest fixed rate home loans on Canstar’s database, with the lender increasing its fixed rates today.

ING has raised all of its fixed rate home loans for new and existing owner-occupier and investor borrowers.

Included in the changes is a 0.10 percentage point increase to the bank’s previously market-leading 2-year Orange Advantage Residential fixed rate of 2.09% (comparison rate 3.77%). This rate has now been hiked to 2.19% (comparison rate 3.79%), meaning ING no longer stands alongside HSBC in offering the lowest fixed interest rate for owner-occupiers on Canstar’s database.

Canstar finance expert Steve Mickenbecker said these fixed rate hikes from ING come as a “surprise” to the market, and follow recent fixed rate cuts from major banks that have been fueled by wholesale funding costs.

“For owner-occupiers, the increases [from ING] range from 0.05 to 0.20 percentage points, but for investors they are as high as 0.40 percentage points, suggesting the bank is reviewing its appetite for housing risk,” Mr Mickenbecker said.

ING is just the third lender on the Canstar database to increase fixed home loan rates so far in June.

“Fixed rate home loans continue to be at the sharpest-priced end of the market, with rates as low as 2.09%,” Mr Mickenbecker said, referring to HSBC’s two-year fixed rate of 2.09% (comparison rate 2.98%).

Lowest Fixed Rate Home Loans
Lender	Product	Rate	Comparison Rate	Monthly repayment
1-Year Fixed
Newcastle Permanent	Premium Plus Package Residential Fixed P&I 1 yr 5k+ Special Offer	2.18%	3.83%	$1,515
2-Year Fixed
HSBC	Residential Fixed P&I 2 yrs <80%	2.09%	2.98%	$1,497
3-Year Fixed
bcu	Residential Fixed P&I 3 yrs	2.16%	3.63%	$1,511
5-Year Fixed
RACQ Bank	Choices Residential Fixed 5 yrs 20k+	2.49%	3.76%	$1,578
Source: www.canstar.com.au – 19/06/2020. Based on owner-occupier home loans available for a loan amount of $400,000, 80% LVR and principal & interest repayments; excluding introductory and first home buyer-only loans. Comparison Rate calculated based on a loan amount of $150,000 repaid over 25 years. Products displayed in the table are those with the lowest rate for each fixed term and (where applicable) are sorted in ascending order by rate, followed by comparison rate, then alphabetically by lender. RACQ Bank home loan open to Queensland borrowers only.Read the Comparison Rate Warning. Monthly repayment column reflects estimated minimum monthly repayments during the fixed term of the loan.*

The new fixed rates at ING are as follows:

Owner-occupiers paying principal and interest:

1-year fixed rate increase by 0.15 percentage points, to 2.44% (3.97% comparison rate)
2-year fixed rate increase by 0.10 percentage points, to 2.29% (3.80% comparison rate)
3-year fixed rate increase by 0.20 percentage points, to 2.44% (3.70% comparison rate)
4-year fixed rate increase by 0.10 percentage points, to 2.69% (3.66% comparison rate)
5-year fixed rate increase by 0.05 percentage points, to 2.69% (3.56% 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 increase by 0.15 percentage points, to 2.34% (3.96% comparison rate)
2-year fixed rate increase by 0.10 percentage points, to 2.19% (3.79% comparison rate)
3-year fixed rate increase by 0.20 percentage points, to 2.34% (3.67% comparison rate)
4-year fixed rate increase by 0.10 percentage points, to 2.59% (3.63% comparison rate)
5-year fixed rate increase by 0.05 percentage points, to 2.59% (3.52% comparison rate)

Investors paying principal and interest:

1-year fixed rate increase by 0.35 percentage points, to 3.09% (4.64% comparison rate)
2-year fixed rate increase by 0.30 percentage points, to 2.94% (4.46% comparison rate)
3-year fixed rate increase by 0.25 percentage points, to 2.94% (4.31% comparison rate)
4-year fixed rate increase by 0.15 percentage points, to 3.19% (4.26% comparison rate)
5-year fixed rate increase by 0.35 percentage points, to 3.44% (4.25% comparison rate)

Investors paying interest-only:

1-year fixed rate increase by 0.40 percentage points, to 3.29% (5.01% comparison rate)
2-year fixed rate increase by 0.35 percentage points, to 3.14% (4.88% comparison rate)
3-year fixed rate increase by 0.30 percentage points, to 3.14% (4.76% comparison rate)
4-year fixed rate increase by 0.20 percentage points, to 3.39% (4.71% comparison rate)
5-year fixed rate increase by 0.40 percentage points, to 3.64% (4.69% comparison rate)

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Elise Donaldson

Finance Journalist

Elise was formerly a Finance Journalist at Canstar. She previously also worked at newswire service - Australian Associated Press (AAP) - writing breaking news stories across digital and print media. She has Bachelors in Journalism and Drama and a Graduate Diploma in Education from QUT.