This afternoon, we learned that ING will be reducing rates for its variable home loan products by 0.20%. And while that’s five basis points shy of the full 0.25% cut, it still sees several ING home loans among the more competitive in the market.
The changes will apply to both new and existing customers, and will take effect on 18 July. Once in place, we’ll see variable rates for the ING Orange Advantage Home Loan (Package) go as low as 3.23% p.a. (3.56% p.a. comparison rate*).
“The decision to pass on only part of this week's cut isn't surprising. I expect that most banks will hold on to some of the latest reduction in the cash rate this time around,” said Mozo’s banking expert, Peter Marshall.
“As we get closer to an official interest rate of 0% banks’ interest margins are squeezed as there is only so far they can cut the rates they have to pay to attract deposit, which they need to help fund loans for mortgages.”
ME Bank also opted to pass on only 0.15% of the cut to its home loan customers, after passing on the full 0.25% rate cut last month. The changes will come into effect on 23 July, and will apply to both new and existing customers.
One day on, few lenders have passed on full cut
It’s been a full day since the Reserve Bank announced it will be reducing the cash rate, and while all four major banks made their plans known within a few hours of the decision, most lenders are still dragging their feet.
As news from other lenders continues to trickle through, we’ll be keeping tabs on our Naughty or Nice table. Check in periodically to see where your lender falls, and if their decision leaves you wanting to make the switch, head over to our variable rate home loan comparison page for some more attractive options.
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