The bank has cut the rates of both its owner occupied and investment fixed rate mortgages by up to 25 basis points, effective from Thursday.
Key points
- ING cuts its fixed mortgage rates by up to 25 basis points.
- This may be an indicator that banks expect interest rates to fall in the medium term.
- ING customers who fix their rates for three or four years will now pay 5.34% p.a in interest, while five years drops to 5.44% p.a, among the lowest longer fixed term rates available in Australia.
Meanwhile, rates on one and two year fixed products with ING will drop by 0.20% p.a.
The announcement comes the day after monthly Consumer Price Index (CPI) figures that showed inflation continued to ease in February, throwing more weight behind suggestions an RBA rate pause in April is increasingly likely.
Rate pause in April?
In light of the collapse of Silicon Valley Bank and low confidence in banking across the world, Westpac Chief Economist Bill Evans now expects a pause in the RBA cash rate hikes in April and bought his terminal prediction down from 4.1% to 3.85%.
"Even if the markets settle by the time of the RBA's April board meeting there will be sufficient uncertainty for a prudent board that was already clearly open to a pause to take that option,” Mr Evans said.
This prediction was despite his belief that February CPI would reveal an increase in inflation, so the drop we saw will likely have solidified his position.
On Thursday CBA economists also echoed the call.
"In what we believe is a very close call, we now expect the RBA to leave the cash rate on hold at 3.6% at the April Board meeting. We ascribe a 55% chance to no change and a 45% probability to a 25 basis point rate increase to 3.85%," they said.
On the other hand, senior economists at ANZ say the CPI data still showed strong 'inflation momentum', and continue to believe there will be a 25 basis point increase in April.
"ING cuts fixed home loan rates - a hint of what's to come?" was originally published on Savings.com.au and was republished with permission.