One of Australia’s largest mortgage lenders distributes money to attract new home loan customers.
ING introduced a new repayment incentive of $ 3,000 to encourage customers of other banks to transfer their loans to the sixth largest lender in the country.
Rival Macquarie dethroned ING from fifth place in the loan market in August of last year.
RateCity’s research director, Sally Tindall, said ING must “fight fire with fire” with the repayment agreement being the latest tool in an attempt to reclaim some of its lost market share.
“The bank cut its fixed rates to one, two and three years a little over a month ago. Now he’s launching a sweetener to grab business from the big banks, ”Ms. Tindall said.
“ING clearly wants to increase its market share, which fell slightly last year. This cashback deal will be part of their offer to turn things around. “
ING offers cashback on all fixed and variable rate loans, but clients must have at least $ 500,000 remaining on their existing loan to qualify for the promotion.
Requests up to September 30 will be eligible and will only be offered to customers refinanced by another bank, with payment due before December 31.
ING’s offer coincides with Westpac and its subsidiaries St George, Bank SA and Bank of Melbourne reducing its cashback offer by $ 1,000 to $ 3,000.
According to RateCity, 25 lenders have repayment offers on both fixed and variable loan products.
“Some of the more competitive cashback offers are fixed rate, however, these loans come with extra fine print that could cost you thousands of dollars if you’re not careful,” Tindall warned.
An analysis conducted by the leading comparison site found that taking a two-year repayment and fixed rate agreement with ANZ, Westpac and ING would financially improve a client between $ 600 and $ 1,500.
A client who accepted ING’s cash back offer and got a fixed rate of 1.84% over two years would earn $ 1,517 after the period.
NAB’s and CBA’s cash back offers, combined with the banks’ respective two-year fixed rates, would make a customer’s situation worse over the period between $ 500 and $ 800.
Ms Tindall said cash back rewards have traditionally come with higher rates, but the low interest rate environment has softened the deal in favor of customers.
“In the past, a low going rate almost always won out over a repayment offer, but banks are increasingly offering both low rates and cash back, which makes the equation great. more competitive than it was before, ”she said.
“Someone who is looking for a competitive rate, bargains the fees, and commits to refinancing regularly could potentially win one of these repayment deals. “
“While it’s always tempting to splurge on the extra money, if you put the cashback money back into your home loan, it will pay off for the life of your loan. “