Lending

ING raises mortgage and loan rates

ING raises mortgage and loan rates

Online Bank ING

Bank online ING has announced that it will increase the interest rate on a range of its variable and fixed home loans by 10-30 basis points starting the next day (February 3rd).).

The changes will lead to increased interest rates for variable loans for the institution’s Orange Advantage loan and increased fixed rates for their Fixed Rate Loan as well as Fixed Rate Loan (with Orange Advantage) products.

In the end that the new low rates for each loan will be:

To lend Rate of interest
Orange Advantage 2.14 percent pa variable rate (2.50 percent pa comparative rate) for owners of the property (<80 percent LVR)
Fixed rate loan A fixed rate of 2.44 percent per annum (comparative cost of 3.97 percent per year*) for a period of one calendar year, for home owners (less than 80 % LVR)
A fixed rate credit (with Orange Advantage) 2.34 percent fixed rate per month (3.96 percent pa comparative rate*) over a period of one year for owners-occupiers (<80 percent LVR)

In November alone, 78 lenders by paydaynow online lending database have increased more than 2500 fixed mortgage rates therefore ING’s decision to increase some of its fixed rates shouldn’t come as a surprise.

It’s fascinating to note the bank’s decision to increase the rates of its Orange Advantage variable loan, because most lenders have changed variable rates in the opposite direction in the past few months. In actual fact, ING cut rates on this loan up to 25 basis points in November.

However rates for ING’s second variable rate loan, the Mortgage Simplifier which is a mortgage simplifier – remain in place.

Homeowners who have an LVR less than 80% can have access to rates that are as low as 1.99 percent per annum (comparator price of 2.02% per year*) using the Mortgage Simplifier that is among the variable rates that are accessible from lenders that have been tracked within Mozo. Mozo database.

ING shares drop 4.4% following earnings, while provisions increase due to inflation fears

ING reported an increase of 27% in its pretax profit for the fourth quarter, which was 1.33 billion euros ($1.50 billion) just a bit lower than analysts’ expectations for 1.47 billion euros as per Refinitiv’s data. Pretax profits were 1.05 billion euros during the same timeframe of 2020. “The small loss is caused by the higher cost of provisions and costs partially offset by the increase in revenue,” said analysts from Jefferies in a report on earnings. Shares, which nearly doubled in the last year, fell 4.0 percent at 12.97 euros as of 0823 GMT.

The bad loan provisions during the quarter rose by 356 million euros, up from just 208 million euros. the majority of this increase being due to the belief that the rising cost of inflation and energy costs could impact mortgage customers in their capacity to pay.While the value of homes is growing in ING’s main German as well as Dutch market, as well as real defaults have been minimal Van Rijswijk claimed that the company believed it was prudent to make the measures.

The value of collateral for commercial loans is also influenced by the rate of inflation and interest rates, CEO Stephen van Rijnswijk claimed. “Inflation has been increasing quite dramaticallywhich means there is a chance that the value of collateral goes down, and in the event that there is a default by the client, it is also a sign that our rate of recovery will fall,” he said.

Van Rijswijk noted that positives from the last quarter were higher loan volumes as well as an increase in fee revenue. In the key measures of bank profitability, the net interest margin at ING sank just a bit from a year ago to 1.37 percent, down from 1.41 percent. The bank has faced pressure by low interest rates however, it has tempered the blow by charging negative interest rates on bigger customer deposits. The commission and fee revenue grew 20 percent to 925 million euros because the bank was charging customers who are retail customers more for banking packages, for payment, as well as investments. The number of loans to customers grew by 4.8 percent or 13.4 milliards euros, to reach 632 billion euro which was boosted by the growth of wholesale bank customers as well as more mortgage loans for German customers.

* NOTE This rate of comparison is only applicable to the specific example or examples shown. Different amounts and lengths of time will result in different rates for comparison. Charges for withdrawals, like prepayment or prepayment costs, and cost savings , like fee waivers, aren’t included in the comparison rate , but could affect the cost for the loan. The rates shown correspond to a guarantee loan that has monthly principal and interest payments of $150,000 over a period of 25 years.

********* The initial monthly repayment figures are only estimates that are basing them on the advertised rate as well as the loan amount and terms that you have entered. Rates or fees and charges and consequently, the total cost of the loan could differ based on the amount of your loan and loan term as well as your credit score. Actual repayments will be contingent upon your personal situation and the changes in interest rates.

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