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Two of Australia’s biggest banks have changed their mortgage rates

Two of Australia’s biggest banks have changed their mortgage rates

Considering a home loan with Macquarie Bank or ING? It may have just gotten cheaper.

Both banks have made changes to a wide variety of their mortgage rates, with Macquarie lowering rates by up to 60 basis points and ING by up to 40 basis points (see tables below).

ING has also increased a few of its home loan interest rates, by up to 11 points.

These interest rate changes apply to selected mortgage offers across:

  • Owner-occupied and investment loans
  • Principal-and-interest and interest-only loans

Looking at just two of the changes, here’s how they could affect the mortgage repayments on a 30-year, $400,000 loan:

Macquarie BankING
ProductBasic Flyer Investment Loan Fixed (principal & interest, LVR 70-80%) 5 yearsMortgage Simplifier Investment Loan (principal & interest, $150k+, LVR < 80%)
Old rate4.74%4.44%
New rate4.14%4.04%
Old repayments$750,304$724,502
New repayments$699,151$690,803
Difference$51,153$33,699

Macquarie and ING v the market

So, how do Macquarie Bank and ING compare to other lenders in terms of interest rates?

Macquarie’s loan is priced at 4.14 per cent, while the average rate for all the five-year investment loans on RateCity is 4.82 per cent (as of 31 March 2019).

ING’s loan is priced at 4.04 per cent, while the average for all the variable principal-and-interest loans on RateCity is 4.72 per cent.

That said, it’s important to note that the cheapest mortgage isn’t always the best mortgage. Other factors to consider when weighing up a home loan include:

  • Loan fees (upfront fees, ongoing fees)
  • Loan features (such as offset account, redraw facility, additional repayments)
  • Lender customer service (branch access, call centre, online banking options)

Need help with your home loan?

Taking out a mortgage can be confusing.Click hereif you’d like to have a free chat with a broker.

Macquarie Bank selected changes

ProductOld advertised rateNew advertised rateNew comparison rateChange in advertised rate
Basic Flyer Home Loan Fixed 1 year (principal & interest, LVR 70-80%)4.04%3.94%3.91%-10 points
Basic Flyer Home Loan Fixed 2 years (principal & interest, LVR 70-80%)4.04%3.84%3.90%-20 points
Basic Flyer Home Loan Fixed 3 years (principal & interest, LVR 70-80%)4.04%3.84%3.89%-20 points
Basic Flyer Home Loan Fixed 4 years (principal & interest, LVR 70-80%)4.34%3.94%3.92%-40 points
Basic Flyer Home Loan Fixed 5 years (principal & interest, LVR 70-80%)4.34%3.94%3.92%-40 points
Basic Flyer Investment Loan Fixed 2 years (principal & interest, LVR 70-80%)4.34%4.04%4.33%-30 points
Basic Flyer Investment Loan Fixed 3 years (principal & interest, LVR 70-80%)4.34%4.04%4.30%-30 points
Basic Flyer Investment Loan Fixed 4 years (principal & interest, LVR 70-80%)4.64%4.14%4.31%-50 points
Basic Flyer Investment Loan Fixed 5 years (principal & interest, LVR 70-80%)4.74%4.14%4.29%-60 points

ING selected changes

ProductOld advertised rateNew advertised rateNew comparison rateChange in advertised rate
Orange Advantage Home Loan (principal & interest, $500k-$1m, LVR < 80%)3.93%3.85%4.17%-8 points
Orange Advantage Home Loan (principal & interest, $1m+, LVR < 80%)3.89%3.81%4.13%-8 points
Orange Advantage Home Loan (interest-only, ($150k-$500k, LVR < 80%)4.33%4.44%4.75%+11 points
Orange Advantage Investment Loan (principal & interest, $150k+, LVR < 80%)4.39%4.09%4.41%-30 points
Orange Advantage Investment Loan (interest-only, $150k+, LVR < 80%)4.69%4.49%4.80%-20 points
Mortgage Simplifier Home Loan (principal & interest, $150k-$1m, LVR < 80%)3.88%3.80%3.82%-8 points
Mortgage Simplifier Home Loan (interest-only, $150k-$500k, LVR < 80%)4.28%4.39%4.41%+11 points
Mortgage Simplifier Investment Loan (principal & interest, $150k+, LVR < 80%)4.44%4.04%4.06%-40 points
Mortgage Simplifier Investment Loan (interest-only, $150k+)4.59%4.44%4.46%-15 points
Fixed Rate Investment Loan 3 years4.19%4.09%5.48%-10 points
Fixed Rate Investment Loan 4 years4.69%4.59%5.51%-10 points
Fixed Rate Investment Loan 5 years4.69%4.59%5.41%-10 points

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Fact Checked -

This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.

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Learn more about home loans

When does Commonwealth Bank charge an early exit fee?

When you take out a fixed interest home loan with the Commonwealth Bank, you’re able to lock the interest for a particular period. If the rates change during this period, your repayments remain unchanged. If you break the loan during the fixed interest period, you’ll have to pay the Commonwealth Bank home loan early exit fee and an administrative fee.

The Early Repayment Adjustment (ERA) and Administrative fees are applicable in the following instances:

  • If you switch your loan from fixed interest to variable rate
  • When you apply for a top-up home loan
  • If you repay over and above the annual threshold limit, which is $10,000 per year during the fixed interest period
  • When you prepay the entire outstanding loan balance before the end of the fixed interest duration.

The fee calculation depends on the interest rates, the amount you’ve repaid and the loan size. You can contact the lender to understand more about what you may have to pay. 

What is an interest-only loan? How do I work out interest-only loan repayments?

An ‘interest-only’ loan is a loan where the borrower is only required to pay back the interest on the loan. Typically, banks will only let lenders do this for a fixed period of time – often five years – however some lenders will be happy to extend this.

Interest-only loans are popular with investors who aren’t keen on putting a lot of capital into their investment property. It is also a handy feature for people who need to reduce their mortgage repayments for a short period of time while they are travelling overseas, or taking time off to look after a new family member, for example.

While moving on to interest-only will make your monthly repayments cheaper, ultimately, you will end up paying your bank thousands of dollars extra in interest to make up for the time where you weren’t paying off the principal.

What is 'principal and interest'?

‘Principal and interest’ loans are the most common type of home loans on the market. The principal part of the loan is the initial sum lent to the customer and the interest is the money paid on top of this, at the agreed interest rate, until the end of the loan.

By reducing the principal amount, the total of interest charged will also become smaller until eventually the debt is paid off in full.

What is a fixed home loan?

A fixed rate home loan is a loan where the interest rate is set for a certain amount of time, usually between one and 15 years. The advantage of a fixed rate is that you know exactly how much your repayments will be for the duration of the fixed term. There are some disadvantages to fixing that you need to be aware of. Some products won’t let you make extra repayments, or offer tools such as an offset account to help you reduce your interest, while others will charge a significant break fee if you decide to terminate the loan before the fixed period finishes.