ING has announced that it is raising its variable interest rates for investor loans, a couple of months after lifting its owner-occupier rates.
Effective from Tuesday, 25 September 2018, ING Australia will lift its interest rates for investor variable home loans by 15 basis points, which will apply to new and existing customers paying principal and interest (P&I) and interest-only (IO).
For investment home loans of at least $150,000, ING will increase its Orange Advantage P&I loan rate to 5.57 per cent p.a. (from 5.42 per cent p.a.), while the rate for its Mortgage Simplifier P&I loan will rise to 5.47 per cent p.a. (from 5.32 per cent p.a.).
Customers with an Orange Advantage IO loan will be required to pay an interest rate of 5.92 per cent p.a. (up from 5.77 per cent p.a.), while those with an Mortgage Simplifier IO loan will be a paying a rate of 5.82 per cent p.a. (from 5.67 per cent p.a.).
The non-major bank also updated its comparison rates for new investor fixed loans. The comparison rate for a one-year fixed rate has risen to 5.70 per cent (up from 5.56 per cent), two-year to 5.57 per cent (up from 5.39 per cent), three-year to 5.50 per cent (up from 5.39 per cent), four-year to 5.45 per cent (up from 5.35 per cent), and five-year to 5.45 per cent (up from 5.37 per cent).
The latest rate changes will not impact new or existing owner-occupier mortgagors, as the lender had already hiked interest rates on owner-occupier variable home loans by 10 basis points in July.
ING did not specify a reason for increasing the rates on this occasion but mentioned that it is a response to market changes.
This week, Bankwest also announced lifting its interests rates for owner-occupier variable home loans by 15 basis points.
ING and Bankwest join a long line of non-major lenders to hike rates in recent months — including Macquarie Bank, AMP, Bank of Queensland, Heritage Bank, Suncorp, Virgin Money and Auswide Bank — due to rising wholesale funding costs.
Three of the big four banks also hiked mortgage interest rates out of cycle this month despite the Reserve Bank holding the official cash rate at a record low 1.5 per cent for two years.
NAB, on the other hand, decided to buck the trend and keep its rates on hold.