ING to shake up fixed home loan interest rates, with a mix of cuts and hikes

ING will make a number of changes to its fixed home loan interest rates for new customers tomorrow, but variable and investor loans will remain untouched for now.

The bank will increase interest rates on its longer-term fixed home loans for owner-occupiers paying principal and interest by between 0.20 and 0.80 percentage points across a range of loan-to-value ratios (LVR) on Wednesday.

This is part of a broader trend in rising four and five-year fixed home loan rates that Canstar has observed on its database since early April.

Owner-occupier customers with deposits of under 10% will face higher rates across all ING’s fixed terms, not just four- and five-year ones.

Along with the interest rate rises come some rate cuts of between 0.15 and 0.35 percentage points on shorter-term loans that are fixed between one and three years.

Investment home loans and variable loans have been spared from any changes this time around.

ING’s rate increases would see an owner-occupier customer with a typical 20% deposit (80% LVR) and principal and interest repayments paying the following interest rates on its fixed-rate loans:

• 2.14% (3.94% comparison rate) for one year (cut by 0.25 percentage points)
• 1.94% (3.74% comparison rate) for two years (cut by 0.35 percentage points)
• 1.99% (3.59% comparison rate) for three years (cut by 0.25 percentage points)
• 2.44% (3.58% comparison rate) for four years (hiked by 0.25 percentage points)
• 2.59% (3.52% comparison rate) for five years (hiked by 0.20 percentage points)

ING also says customers may be eligible for a discount of 0.10 percentage points on any of these fixed rates if they also take out an Orange Advantage variable home loan product and combine the two loans together as a split loan. This means the cheapest fixed loan rate from ING will be 1.84% (3.73% comparison rate) for Orange Advantage customers who have at least a 20% deposit on their two-year fixed loan.

The bank’s cheapest longer-term (four-year or five-year) fixed rate loan will be 2.34% (3.54% comparison rate), fixed for four years, also for Orange Advantage customers with at least a 20% deposit.

How does that compare to the cheapest rates on the market?

Analysis of interest rates on Canstar’s database shows BankVic currently has the cheapest longer-term fixed rate, while bcu has the cheapest fixed rate out of all terms. See more in the breakdown below.

Top 5 lowest four- and five-year fixed rate loans on Canstar’s database

1. 1.95% – BankVic’s Premium Home Fixed four years for $50,000+, 3.50% comparison rate^, 95% maximum LVR
2. 2.04% – Hume Bank’s myBlue P&I Fixed four years, 2.07% comparison rate, 60% maximum LVR
3. 2.10% – Bank Australia’s Basic Fixed five years, 2.42% comparison rate, 60% maximum LVR
4. 2.14% – Regional Australia Bank’s Partnership Advantage Fixed P&I four years, 3.11% comparison rate, 95% maximum LVR
5. 2.14% – Newcastle Permanent’s Premium Plus Package Residential Fixed P&I four years $5,000 special offer, 3.49% comparison rate, 80% maximum LVR

Source: www.canstar.com.au. Based on rates as at 25/05/2021, but factoring in ING’s changes which will come into effect on 26/05/2021. Based on owner-occupier, principal and interest 4- and 5-year fixed loans available for a $500,000 loan amount at any LVR. Table sorted in ascending order by rate, followed by comparison rate. ^Comparison rate calculated on a loan of $150,000 over 25 years. Read the comparison rate warning.

Top 5 lowest fixed rate loans on Canstar’s database

1. 1.67% – bcu’s Residential Fixed P&I one year, 3.84% comparison rate^, 95% maximum LVR
2. 1.69% – Greater Bank’s Great Rate Fixed one year, 3.49% comparison rate, 95% maximum LVR
3. 1.69% – RACQ Bank’s Choices Residential Fixed one year, 4.15% comparison rate, 60% maximum LVR
4. 1.74% – Homestar Finance’s Star Fixed P&I two years, 2.23% comparison rate, 80% maximum LVR
5. 1.79% – Hume Bank’s myBlue P&I Fixed one year, 2.06% comparison rate, 60% maximum LVR

Source: www.canstar.com.au. Based on rates as at 25/05/2021, but factoring in ING’s changes which will come into effect on 26/05/2021. Based on owner-occupier, principal and interest fixed loans available for a $500,000 loan amount at any LVR. Table sorted in ascending order by rate, followed by comparison rate. ^Comparison rate calculated on a loan of $150,000 over 25 years. Read the comparison rate warning.