ANZ jacks up interest rates for investors

THE third of the big four banks has jacked up home loan interest rates for investors, but owner-occupiers have been spared.

Just CommBank remains. Picture: Joel Carrett/AAP

ANZ will have the highest interest rate for investor home loans out of the big four banks after announcing a 25 basis point rise, but owner-occupiers have been spared.

The bank announced the move on Friday, making it the third bank after NAB and Westpac to hike rates out of cycle with the Reserve Bank. CommBank and ANZ were widely expected to follow suit this week.

Despite the official cash rate remaining on hold at its historic low of 1.5 per cent, banks are raising costs for borrowers in a bid to keep a lid on growth in loans to property investors — and to protect their profit margins.

ANZ’s standard variable rate for investor loans will increase by 25 basis points to 5.85 per cent per annum from next Friday, 31 March. Variable rates for owner-occupiers will stay at 5.25 per cent.

The bank is also increasing rates for interest-only loans. From April 22, new interest-only investor loans will increase by 11 basis points to 5.96 per cent, while owner-occupier loans will increase by 20 basis points to 5.45 per cent.

Existing interest-only loans will be hit with increases from late July. The bank says it will give customers the option to switch to principal and interest repayments without incurring a switching fee.

Variable interest rates for business loans will also increase by eight basis points.

“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,” ANZ group executive Fred Ohlsson said in a statement.

“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 homeowners 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.”

CURRENT STANDARD VARIABLE RATES

OWNER-OCCUPIER

• CommBank: 5.22pc

• ANZ: 5.25pc (unchanged)

• NAB: 5.32pc (up from 5.25pc)

• Westpac: 5.32pc (up from 5.29pc)

INVESTOR

• CommBank: 5.56pc

• ANZ: 5.85pc (up from 5.60pc)

• NAB: 5.80pc (up from 5.55pc)

• Westpac: 5.79pc (up from 5.56pc)

Originally published as ANZ jacks up interest rates for investors