ING lowers deposit threshold for investment properties

MFAA award winner explains current offers

ING lowers deposit threshold for investment properties

ING Australia is giving low deposit borrowers another option to enter the property market, raising its maximum loan to value ratio for residential property purchased as an investment.

The non-major bank is also providing the ability to make interest-only repayments on owner occupier fixed rate loans.

ING last week won the Non-Major Lender Award at the MFAA State Excellence Awards for NSW/ACT.

ING Australia head of third party and distribution Glenn Gibson (pictured above) said being named by the MFAA as the best non-major bank in NSW for 2023 “meant a lot” to ING, as it recognised excellence in customer service, professionalism, ethics, growth, and innovation. 

The award follows being crowned by Canstar as Bank of the Year in May, for the fourth year in a row.

“The Canstar judges noted our competitive suite of products including our consistently low variable home loan rates and excellent customer service,” Gibson said.

ING’s latest offer for investment loans is focused on making it easier for customers to get an investment loan, he said.

In response to feedback from brokers and customers, the bank has raised its maximum LVR from 80% to 90% (with LMI premium). New applicants buying residential property for investment purposes can now borrow up to 90% of the property value, meaning they’re able to apply with a deposit of 10%.

The offer applies to investor loans that are either principal and interest or interest-only, and came into effect from June 1, Gibson said.

“We believe these changes will make it easier for first time buyers with lower deposits who are wanting to purchase an investment property, and existing home loan customers considering an investment property,” he said.

Responding to questions from MPA, Gibson said that increasing the LVR threshold for investment loans to 90% was in response to feedback that saving a standard deposit remained a significant hurdle for homebuyers.

“For some first time buyers and existing homeowners, they can afford the repayments and want to buy now but saving a 20% deposit is holding them back from investing,” Gibson said.

He said that the offer was aimed at those able to service a loan but who found it a challenge to save the full 20% deposit.

“It may also provide an alternative way for first time buyers to get on the homeownership ladder,” Gibson said.

ING announced on Friday that its variable home loan rates would increase by 0.25% from June 14 in line with the official cash rate increase announced in June.  From June 14, ING increased most interest rates applying to its fixed rate loans for owner-occupiers and investors, effective for loans settling from that date.

Gibson confirmed that ING had removed the rental yield cap, put in place as a “conservative risk parameter” to enable the bank to test the investor market.

“We removed these in May to make it easier for investors to borrow, following broker and customer feedback,” he said.  

ING continues to update brokers on changes and what they might mean for customers, Gibson said.

“We also host regular training, webinars and catch up days with brokers to ensure we’re equipping them with what they need to assist customers.”

Interest-only option for LVR up to 80% (minimum 20% deposit)

Effective June 14, ING confirmed that the variable interest rate applying to its Mortgage Simplifier and Orange Advantage products (principal and interest, total borrowing $150,000 plus LVR 80.01% to 90%) is 6.49%. The equivalent variable interest-only rate is 6.79%.

The variable interest rate applying to the ING Orange Advantage product (principal and interest, total borrowing $150,000 plus LVR 80.01% to 90%) is 6.49%. 

Effective June 14, the fixed interest rates that apply when combined with a variable owner-occupier Orange Advantage home loan (principal and interest, LVR 80% or less, minimum borrowing $50,000), are 5.99% for one year, 5.89% for two years, 5.69% for three years, and 5.64% for four and five years.