ANZ to lift home loan rates beyond Reserve Bank's official cash rate hike

SO much for beating "Barbara" as ANZ joins Commbank in lifting rates 0.14pc beyond RBA move.

The ANZ Bank headquarters in Sydney / News Limited

ANZ has lifted the interest rate on its standard variable home loans by 39 basis points to 7.8 per cent and become the first bank in Australia to scrap its exit fee for mortgages.

ANZ said the increase to its standard variable rate on home loans was due to the "sustained" rise in the cost of its funds in recent months.

Last week the Reserve Bank lifted its official cash rate by 0.25 per cent to 4.75 per cent.

The Commonwealth Bank then moved to lift its variable home loan rates by 45 basis points to 7.81 per cent, prompting a flood of angry customers to switch their home loans to other lenders.

Westpac and NAB are yet to move their interest rates. Westpac's variable rate remains at 7.51 per cent, while NAB's is still 7.24 per cent.

ANZ said it would scrap its "deferred establishment fee", or exit fee, on mortgages and would waive loan approval fees for all new and existing mortgage customers applying for the three-year fixed rate mortgage by December 31.

The bank will also give borrowers of other institutions $1000 to offset costs if they switch to ANZ and take up a three-year fixed rate loan.

Over the past week, ANZ raised the interest rate on one and two-year fixed home loans by four basis points to 7.03 per cent and 7.46 per cent respectively and lowered its three-year fixed loan rate by two basis points to 7.54 per cent, according to data from financial comparison website RateCity.

The bank's interest rate for its four-year fixed home loan was increased by nine basis points to 7.78 per cent, and its the rate for its five-year fixed mortgage is eight basis points higher at 7.88 per cent.

ANZ said it would drop the interest rate on its three-year fixed rate mortgage to 7.1 per cent.

ANZ said the changes would become effective Monday, except interest rate changes on credit card, which would become effective Tuesday.

Interest rates on credit cards will rise by 25 basis points and rates on business loans will increase by 39 basis points, the bank said.

With AAP