More than 100,000 borrowers will be slugged with higher mortgage repayments from next week after ING became the second big bank to lift its home loan rates in 2019.
The nation’s fifth-largest housing lender will increase variable home loan rates by 0.15 per cent for new and existing customers from Thursday, February 7.
ING already raised variable rates by 0.10 per cent in July last year and by 0.15 per cent for investors in September, according to RateCity. The change will add around $30 a month to the average $350,000 home loan.
“We review our rates regularly and occasionally we need to increase them to ensure we can adjust to market changes while continuing to be best placed to provide our customers with simple, effective banking products,” an ING spokeswoman told the Herald Sun.
It comes a week after NAB finally caved and raised its rates, saying it “held off as long as we could” after CommBank, ANZ and Westpac all began out-of-cycle increases in August last year.
“We wanted to reward our existing customers for their loyalty and held off as long as we could despite being subject to the same increasing wholesale funding costs and market pressures as other major lenders,” NAB spokesman Mike Baird said.
RateCity research director Sally Tindall said ING’s announcement was disappointing and would come as a surprise to some customers who weren’t expecting a second out-of-cycle rate hike.
The Reserve Bank has not moved the official cash rate from its record low of 1.5 per cent since its last cut in August 2016, but the banks have blamed rising interest rates in overseas money markets for driving up their borrowing costs.
“The cost of funding pressures are real and here to stay, and we expect more lenders to follow in a second round of hikes,” Ms Tindall said in a statement.
“If your bank decides to hike rates in 2019, you don’t have to take it lying down. If you’re on a variable rate it’s your right to take your home loan down the road to a lender offering a more competitive rate.”
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