Home loan customers enjoy out-of-cycle interest rate cuts

HOME loan customers are revelling in more out-of-cycle interest rate cuts after one of Australia’s largest lenders slashed rates by as much as 0.19 per cent.

Home loan interest rates are continuing to fall below the four per cent.

HOME loan customers are revelling in more out-of-cycle interest rate cuts after one of the nation’s largest lenders yesterday announced it was slashing rates by as much as 0.19 per cent.

The nation’s sixth largest mortgage lender, ING Direct, will drop rates across some variable and fixed loans for new customers and will be the bank’s lowest-ever mortgage deals.

A couple have purchased their first home and taken out a new mortgage. Picture: iStock.

One of the bank’s biggest reductions was to three-year fixed loans where it cut its rate by 0.19 per cent to 3.69 per cent on loans that are split between variable and fixed.

The lender also sliced their popular Orange Advantage loan by 15 basis points to a record low of 3.79 per cent and the deal applies to mortgages with a loan-to-value ratio below 80 per cent.

ING Direct’s head of product Tim Newman said the drops were a result of the bank rewarding customers with good value home loan deals.

ING Direct head of product Tim Newman. Picture: Supplied.

“It’s a very competitive market at the moment and we’re seeing record low home loan rates which is great news for borrowers,’’ he said.

“This is the perfect time for people to evaluate their current loan, do some research and make sure they’re still getting the best value.”

But the bank would not confirm whether they would drop rates even further if there is a cash rate cut in August.

ING Direct has more than $40 billion in home loans in Australia and 190,000 mortgage customers.

Earlier this month National Australia Bank dropped its interest rates across one, two, three and four-year fixed terms for owner occupiers which saw deals for below four per cent on all these products.

Homeloanexperts.com.au’s managing director Otto Dargan said while there’s strong forecast of an August rate cut don’t expect your lender to pass it on in full.

Home Loan Experts managing director Otto Dargan expects that lenders will not pass on the rate cut in full if it drops in August.

“The market is expecting the RBA to drop rates in August, however that doesn’t necessarily mean the banks will pass on the full cut,’’ he said.

“People should talk to their mortgage broker who can do a pricing request and if their bank won’t match it they should go elsewhere.”

The Reserve Bank of Australia is widely tipped to drop the cash rate to a record low of 1.5 per cent when it meets again next month — the Australian Securities Exchange’s RBA Ratetracker which shows market expectations of a rate cut has forecast a 70 per cent of an August drop.

[e-mail]

DISCOUNTED VARIABLE RATES — MAJOR BANKS

Lender Product Advertised rate

ANZ Simplicity Plus 4.67%

CBA No Fee Variable 4.65%

NAB Base Variable (principal and interest) 4.2%

Westpac Premier Package Rocket Repay Loan 4.53%

ING Direct Orange Advantage 3.79%

Source RateCity. Note: $300,000 30-year loan and a 20 per cent deposit.