ING latest to cut fixed rates: Home loan package now among the cheapest

By Niko Iliakis · · 3 min read
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Today, ING announced it will be cutting fixed rates across a number of its home loan offerings, making it the latest in a long list of lenders to implement changes in recent months.

The cuts range from 10 to 19 basis points, and will apply to both packaged and unpackaged options for owner occupiers as of 24 April. The new rates are as follows:

ING Fixed Rate Loan (Owner Occupier, Principal & Interest)

  • 2 year fixed rate: Reduced from 3.85% to 3.69% p.a. (4.74% comparison rate*)
  • 3 year fixed rate: Reduced from 3.93% to 3.64% p.a. (4.65% p.a. comparison rate*)
  • 5 year fixed rate: Reduced from 4.19% to 4.09% p.a. (4.62% p.a. comparison rate*)

ING Fixed Rate Loan (Owner Occupiers with Orange Advantage, Principal & Interest)

  • 2 year fixed rate: Reduced from 3.75% to 3.59% p.a. (4.72% comparison rate*)
  • 3 year fixed rate: Reduced from 3.83% to 3.64% p.a. (4.63% p.a. comparison rate*)
  • 5 year fixed rate: Reduced from 4.09% to 3.99% p.a. (4.58% p.a. comparison rate*)

With these changes in place, ING’s 2 and 3 year terms will both sit among the top five fixed packaged rates in our database.

What does this mean for your repayments? Compared to the previous 3 year fixed rate, owner occupiers taking out a loan of $400,000 over 30 years with principal and interest repayments would save $43 per month, or $1,548 throughout the fixed period. (This doesn't take into account fees, charges, and the reverting variable rate, however.)

Downward trend in fixed rates shows no sign of slowing

There’s been a flurry of lenders making cuts to fixed rates as of late, and the trend seems set to continue for the foreseeable future. Along with ING, NAB, Virgin Money and Heritage Bank recorded several cuts of their own recently. Some of those changes include:

NAB Tailored Home Loan (Owner Occupier, Principal & Interest)

  • 3 year fixed rate: reduced from 3.99% to 3.89% p.a. (5.09% p.a. comparison rate*)
  • 5 year fixed rate: reduced from 4.29% to 4.19% p.a. (5.01% p.a. comparison rate*)

Virgin Money Reward Me Fixed Rate Home Loan (Owner Occupier, Principal & Interest)

  • 3 year special: Reduced from 3.82% to 3.69% p.a. (3.90% p.a. comparison rate*)
  • 4 year special: Reduced from 4.34% to 3.99% p.a. (3.99% p.a. comparison rate*)
  • 5 year special: Reduced from 4.49% to 4.09% p.a. (4.04% p.a. comparison rate*)

Heritage Bank Fixed Loan (Owner Occupier, Principal & Interest)

  • 1 year fixed rate: Reduced from 3.89% to 3.79% p.a. (4.18% p.a. comparison rate*)
  • 2 year fixed rate: Reduced from 3.79% to 3.74% p.a. (4.17% p.a. comparison rate*)
  • 3 year fixed rate: Reduced from 3.85% to 3.79% p.a. (4.18% p.a. comparison rate*)
  • 5 year fixed rate: Reduced from 4.39% to 4.09% p.a. (4.30% p.a. comparison rate*)

Should you lock in a fixed rate?

Despite these changes, Mozo Product Data Manager Peter Marshall warns against rushing into anything: “Anyone considering locking in a rate now needs to balance the certainty of a rate that is low by today's standards against the possibility that fixed rates could fall further over coming months.”

What's more, borrowers will also need to take into account the increasing likelihood that the RBA will cut the cash rate in the coming months, which will result in lower variable rates.

“This is a familiar dilemma which is often best resolved by fixing half the loan amount to get some certainty, but remaining flexible in case rates do fall further,” Marshall said.

So if you’re in the market for a home loan, you’ll need to consider all the options available to you. Take a look at our fixed rate home loan comparison page for an overview of the rates on offer.

*WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The
comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.