CBA, ING slash variable rates, unbothered by new lending restrictions

By Gerv Tacadena

(Updated, October 18) The movement of mortgage rates remained a hot topic over the past week, as some lenders — including Commonwealth Bank and ING — have lowered their variable rates.

These changes came more than a week after the Australian Prudential Regulation Authority raised the servicing rate for home-loan applications.

Brighter Finance founder Marcus Roberts said APRA's latest move is intended to reduce risks from applicants who intend to borrow at or close to their maximum capacity. 

"The actual interest rates that have been reduced with some lenders are more aligned to both appetite for new business, and the anticipated cost of funds that each lender is working from. Whilst they might appear at odds with each other, the two are largely for separate purposes," he told Your Mortgage.

Mr Roberts said it is crucial for borrowers to understand their capacity and, as much as possible, reduce or cancel any unused facilities such as credit cards.

"Whilst we are currently in a low interest rate environment, it's important to understand not just what your actual repayments are as at today, but what they would look like if they were 1% higher or more — are you still comfortable with the repayments should interest rates rise in the medium to longer term?" he said.

Commonwealth Bank

Commonwealth Bank has lowered its variable-rate offering across its owner-occupier and investor products.

The most notable was the 40bps cut for owner-occupiers under Extra Home Loan who are borrowing with an LVR of less than 70%.

Meanwhile, CBA raised some of its fixed rates for owner-occupiers, particularly those with fixed-rate terms of two years and higher.

Owner-occupier Rates:

  • Extra P&I 80-95% - down by 14bps to 2.99% p.a. (3% p.a. comparison rate)
  • Extra P&I 70-80% - down by 30bps to 2.39% p.a. (2.4% p.a. comparison rate)
  • Extra P&I <70% - down by 40bps to 2.29% p.a. (2.3% p.a. comparison rate)
  • Residential Fixed P&I 1 yr - down by 10bps to 2.14% p.a. (4.47% p.a. comparison rate)
  • Residential Fixed P&I 2 yrs - up by 10bps to 2.24% p.a. (4.28% p.a. comparison rate)
  • Residential Fixed P&I 3 yrs - up by 10bps to 2.44% p.a. (4.15% p.a. comparison rate)
  • Wealth Package Residential Fixed P&I 1 yr 150k+ - down by 10bps to 1.99% p.a. (4.1% p.a. comparison rate)
  • Wealth Package Residential Fixed P&I 2 yrs 150k+ - up by 10bps to 2.09% p.a. (3.96% p.a. comparison rate)
  • Wealth Package Residential Fixed P&I 3 yrs 150k+ - up by 10bps to 2.09% p.a. (3.87% p.a. comparison rate)

Investor Rates:

  • Inv Extra P&I <70% - down by 23bps to 2.89% p.a. (2.9% p.a. comparison rate)
  • Inv Extra P&I 70-80% - down by 16bps to 2.99% p.a. (3% p.a. comparison rate)
  • Investment Fixed P&I 1 yr - down by 20bps to 2.64% p.a. (5.03% p.a. comparison rate)
  • Wealth Package Investment Fixed P&I 1 yr 150k+ - down by 20bps to 2.49% (4.66% p.a. comparison rate)

ING

ING has made similar movements with its mortgage rates.

The lender has lowered its variable rates for both investors and owner-occupiers by up to 25bps.

On the other hand, ING raised the fixed rates for owner-occupiers by up to 20bps.

Variable Rates:

  • Orange Advantage Variable PI 150-499k 80% - down by 25bps to 2.29 p.a. (2.64% p.a. comparison rate)
  • Orange Advantage Variable PI 500-999k 80% - down by 25bps to 2.29 p.a. (2.64% p.a. comparison rate)
  • Mortgage Simplifier PI 150-499k 80% - down by 25bps to 2.24 p.a. (2.27% p.a. comparison rate)
  • Mortgage Simplifier PI 500-999k 80% - down by 25bps to 2.24 p.a. (2.27% p.a. comparison rate)

Fixed Rates:

  • Orange Advantage Residential Fixed 3 yrs ≤ 80% - up 20bps to 2.09 p.a. (3.61% p.a. comparison rate)
  • Orange Advantage Residential Fixed 4 yrs ≤ 80% - up 20bps to 2.54 p.a. (3.61% p.a. comparison rate)
  • Orange Advantage Residential Fixed 5 yrs ≤ 80% - up 20bps to 2.69 p.a. (3.56% p.a. comparison rate)
  • Residential Fixed 2 yrs ≤80% - up 5bps to 1.99 p.a. (3.75% p.a. comparison rate)
  • Residential Fixed 3 yrs ≤80% - up 20bps to 2.19 p.a. (3.64% p.a. comparison rate)
  • Residential Fixed 4 yrs ≤80% - up 20bps to 2.64 p.a. (3.64% p.a. comparison rate)
  • Residential Fixed 5 yrs ≤80% - up 20bps to 2.79 p.a. (3.60% p.a. comparison rate)

Investor Rates:

  • Inv Orange Advantage Variable PI 150-499k - down by 25bps to 2.44% p.a. (2.79% p.a. comparison rate)
  • Inv Orange Advantage Variable PI 500k-1m - down by 25bps to 2.44 p.a. (2.79% p.a. comparison rate)
  • Inv Mortgage Simplifier PI 150-499k - down by 25bps to 2.39 p.a. (2.42% p.a. comparison rate)
  • Inv Mortgage Simplifier PI 500k+ - down by 25bps to 2.39 p.a. (2.42% p.a. comparison rate)

Westpac 

For the fourth time this year, Westpac has raised its fixed rates. 

The bank made 10bps increases across its fixed-rate offering for owner-occupier. The rate hike also applies to borrowers under the Premier Advantage.

These are some notable changes:

  • Premier Advantage Fixed Options P&I 2 yrs 70% 150k+ - 1.99% p.a. (3.40% p.a. comparison rate)
  • Premier Advantage Fixed Options P&I 3 yrs 70% 150k+ - 2.08% p.a. (3.33% p.a. comparison rate)
  • Premier Advantage Fixed Options P&I 2 yrs 95% 150k+ - 2.09% p.a. (3.5% p.a. comparison rate)
  • Premier Advantage Fixed Options P&I 3 yrs 95% 150k+ - 2.18% p.a. (3.42% p.a. comparison rate)
  • Fixed Options P&I 2 yrs 95% - 2.29% (4.31% p.a. comparison rate)
  • Fixed Options P&I 3 yrs 95% - 2.38% (4.15% p.a. comparison rate)
  • Fixed Options P&I 2 yrs 70% - 2.19% (4.21% p.a. comparison rate)
  • Fixed Options P&I 3 yrs 70% - 2.28% (4.05% p.a. comparison rate)

Greater Bank 

Customer-owned Greater Bank also raised its rates for owner-occupiers and investors. 

Greater Bank applied a 15bps increase in its three-year fixed rate across its Ultimate Discount and Great Rate Products. 

However, it made a bigger increase of 35bps in its three-year standard fixed rate, which is now at 2.34% p.a. 

Here are some of the changes:

  • Ultimate Fixed 3 yrs - 2.14% p.a. (3.55% p.a. comparison rate)
  • Great Rate Fixed 3 yrs - 2.14% (2.19% p.a. comparison rate)
  • Ultimate Discount Investment P&I Fixed 3 yrs 150k+ - 2.34% p.a. (3.11% p.a. comparison rate)
  • Great Rate Discount Investment Fixed P&I 3 yrs $150k+ - 2.34% p.a. (2.31% p.a. comparison rate)

Australian Military Bank

Customer-owned Australian Military Bank has lowered its one-year fixed rate by 94bps while hiking its three-year fixed rate by 10bps. Here are the new rates for the two fixed-rate products:

  • Fixed Rate 1-Year - down by 94bps to 1.95% p.a. (4.46% p.a. comparison rate)
  • Fixed Rate 3-Year - up 10bps to 2.29% p.a. (4.1% p.a. comparison rate)

AMP Bank

Investors who would be applying for variable rates under AMP will enjoy lower variable rates as the lender lowered the mortgage costs for loans under the Professional Package line.

Here are the changes:

  • Professional Package Investment Variable P&I ≤80% 100-499k - down by 63bps to 2.49% p.a. (2.91% p.a. comparison rate)
  • Professional Package Investment Variable IO 80% 100-499k - down by 54bps to 2.79% p.a. (2.97% p.a. comparison rate)
  • Professional Package Investment Variable P&I 90% 100-499k - down by 52bps to 3.09% p.a. (3.49% p.a. comparison rate)
  • Professional Package Investment Line of Credit 100-499k - down by 54bps to 2.99% p.a. (3.13% p.a. comparison rate)
  • Professional Package Investment Construction 100-500k - down by 54bps to 2.79% p.a. (3.45% p.a. comparison rate)

Unity Bank

Member-owned Unity Bank has lowered its two-year fixed rate for owner-occupiers paying P&I. The new rate is now 25bps lower at 2.24 p.a. (3.97% p.a. comparison rate).

Photo by K8 on Unsplash.

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