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ANZ increases interest rates

The big four bank has announced increases to its investor, business and interest-only variable rates.

ANZ has announced that the variable interest rate paid by property investors will increase by 0.25 per cent per annum (pa) from 5.60 per cent pa to 5.85 per cent pa effective from Friday (31 March).

The bank also announced it will introduce new variable interest rates for customers choosing to pay interest-only on their home loans.

From 22 April, variable interest rates for new investor and owner-occupier home loan customers who choose to repay interest-only will increase.

Investor variable rate home loans (interest only) will increase from 5.85 per cent pa to 5.96 per cent pa. 

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Owner-occupier variable rate home loans (interest only) will increase by 0.20 per cent pa from 5.25 per cent pa to 5.45 per cent pa.

The variable interest rates for the 80 per cent of owner-occupier borrowers who repay principal and interest on their standard variable home loan remain unchanged at 5.25 per cent pa.

Existing lending

From late July, increases applied to new lending will apply to existing investor and owner-occupier variable home loan customers who choose to repay interest-only. 

ANZ said it will be writing to existing interest-only variable home loan customers from May to provide them with advance notice of the change and the option of switching to repay principal and interest on their loan at a lower interest rate without incurring a fee.

Lastly, for business borrowers, business variable rate indices will increase by 0.08 per cent pa. 

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The ANZ Equity Manager Rate will increase by 0.25 per cent pa to 6.07 per cent pa.

Speaking of the changes, ANZ group executive for Australia, Fred Ohlsson, said: “We are pleased to be in a position to keep rates unchanged for the 80 per cent of owner-occupier home borrowers who pay principal and interest on their loan.

“This is a clear signal that we are open for business for Australians either looking to buy a home or looking for a better deal.

“The changes we are making in home lending affect investors and borrowers who only repay interest on their loan. These changes reflect a need to closely manage our regulatory obligations, our portfolio risk and the competitive environment.

"We recognise the day-to-day challenges that home-owners face with their household budgets. We believe this is a balanced decision that reflects the range of regulatory and risk factors, and the pressures on family budgets. This is why we are providing our customers with interest-only home loans additional notice and the option to switch to repaying principal and interest to take advantage of the lower rate,” Mr Ohlsson said.

[Related: CBA lifts variable rates by 26 basis points]

ANZ increases interest rates
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Annie Kane

Annie Kane is the editor of The Adviser and Mortgage Business.

As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts. 

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