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The Breakfree package was said to provide a discounted interest rate and allow customers to bundle their home loan with other products such as a credit card and an everyday banking or offset account, in exchange for paying an annual fee.
But, the controversial package has also been subject of an ASIC investigation, over its failure to provide loan benefits promised with offset transaction accounts.
A recent lawsuit from the regulator has claimed ANZ failed to provide certain benefits, which included fee waivers and interest rate discounts, to around 580,447 customer accounts – resulting in a remediation bill to its customers at $200 million.
ANZ said under its new approach to home loans, customers will not pay: a loan approval fee, loan administration fees, valuation administration fees, progress payment fees, loan renegotiation fees, and guarantor administration fees.
ANZ group executive Australia retail and corporate, Mark Hand said: “We are on a mission to improve the home loan experience for our customers.
“This is a significant change that will help us reach that goal.
“We understand customers want more choice today about how they structure their home loans and our new approach provides that while retaining a discounted interest rate and no annual package fee.
“This is really good news for our home loan customers who only want to pay for the products and features they value and choose to use. We’ve been speaking to them and they want simple options with a competitive interest rate and that is what we are now providing.”
ANZ has claimed it is the first major Australian bank to remove the home loan package.
The major bank will offer three simplified home loan products for customers to choose from: ANZ Standard Variable, ANZ Fixed and ANZ Simplicity Plus – with no ongoing ANZ fees.
Customers who want an offset account, can choose that for $10 per month.
ANZ said these “simpler home loans” were designed to make it easier for customers to see their options clearly and make decisions with greater understanding and confidence.
Existing Breakfree package customers will retain their current interest rate discounts when they are converted to the simplified home loan proposition in September.