ING Direct introduces lowest ever variable rate

The non-major bank has reduced the variable rate on its Orange Advantage loan by 15 basis points to 3.79 per cent for owner-occupiers – the lowest ever rate for this product.

The new rate is available for loans that are formally approved with a minimum LVR of 80 per cent.

ING Direct has also cut rates on some of its fixed-rates when split with an Orange Advantage loan.

The bank’s one-year rate has seen the biggest reduction, down 20 basis points to 3.89 per cent, while its three-year rate has been cut by 19 basis points to 3.69 per cent.

ING Direct’s two-year and four-year fixed rates have also been reduced, down 17 basis points and 15 basis points respectively to 3.74 per cent and 4.34 per cent.

According to the latest AFG Competition Index, the bank has managed to boost its share of broker-originated mortgages in every loan category over the June 2016 quarter, which saw its total market share grow from 1.5 per cent in February to 4.3 per cent in May.

The bank was the only non-major to lift its share of fixed rate mortgages over the period, from 1.6 per cent in February to 5.0 per cent in May, while its share of investor loans grew from 0.3 per cent to 0.7 per cent.

ING Direct has also proven its strength in the first home buyer market, lifting its share from 0.7 per cent in February to 4.4 per cent in May.

Meanwhile, in the highly competitive refinancing space, the foreign-owned lender ramped up its share from 2.1 per cent to 6.2 per cent over the quarter. ING Direct now holds the lion’s share of refinance loans among the non-majors on AFG’s panel.

The bank’s total mortgage volumes grew by 2.6 per cent to $39.8 billion in the 2015 calendar year, with its branded mortgage volumes experiencing a 10.8 per cent increase.

Mark Woolnough, head of third-party distribution at ING Direct, said much of the mortgage growth was due to its broker network.

“Mortgage brokers are absolutely critical to our business, responsible for nine out of every 10 ING Direct mortgages,” Mr Woolnough said.

“We’ve been working with brokers for more than 16 years, and we continue to nurture these relationships with great value-driven products and fair and transparent remuneration.

“I’m confident the broking channel will continue to grow beyond its current 52 per cent market share, as its role in driving consumer choice and value is increasingly recognised across the industry.”

ING Direct’s focus on diversifying its loan portfolio has also paid off, with the bank increasing its commercial portfolio by more than 17 per cent last year.

“The appetite for commercial property is definitely growing, and we see a huge opportunity not only for our business, but for investors and for brokers, [by] diversifying risk and sustainably building business,” Mr Woolnough said.

[Related: Suncorp reveals new variable mortgage offering]