ANZ hikes fixed home loan rates by almost 50 basis points

author-avatar By on June 11, 2021
ANZ hikes fixed home loan rates by almost 50 basis points

ANZ has hiked long-term fixed rates by up to 45 basis points for owner-occupiers today, while some rates received cuts.

The big four bank raised the interest rates on its four and five-year Breakfree Residential fixed rate home loans for those making principal and interest repayments.

The following loans were affected:

  • The Breakfree Residential four year fixed rate with a Loan to Value Ratio (LVR) less than 80% was raised by 25 basis points to 2.49% p.a. (3.26% p.a. comparison rate*)
  • The Breakfree Residential five year fixed rate with an LVR less than 80% was raised by 45 basis points to 2.69% p.a. (3.30% p.a. comparison rate*)
  • The Breakfree Residential four year fixed rate with an LVR 80-90% was raised by 25 basis points to 2.54% p.a. (3.40% p.a. comparison rate*)
  • The Breakfree Residential five year fixed rate with an LVR 80-90% was raised by 45 basis points to 2.74% p.a. (3.44% p.a. comparison rate*)

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Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers. 

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term.


ANZ also cut the fixed interest rate by up to 15 basis points on its two year Breakfree Residential loan to just 1.94% p.a (3.24% p.a. comparison rate*), the first time ANZ has offered a sub-2% loan. 

ANZ joins fellow big four lender Westpac in hiking rates this week, after Westpac announced on Tuesday it would be raising rates by up to 10 basis points.

Commonwealth Bank announced in May it was marginally increasing its three and four-year fixed rates by 5 basis points, while ING announced increases to some of its four and five-year fixed rates by up to 80 basis points.

Lenders have been able to offer historically low interest rates of late, partly thanks to the Reserve Bank's Term Funding Facility (TFF) providing cheap funds. 

Data from the Australian Prudential Regulation Authority (APRA) revealed on Wednesday the number of new loans with high debt-to-income ratios increased in the March quarter as banks drew from the TFF. 

ANZ yesterday forecast the Reserve Bank (RBA) would be forced to increase the cash rate in 2023.

ANZ economists said inflation and wage growth, along with a drop in the unemployment rate, would mean the RBA would have to take the cash rate to 0.50% ahead of the RBA's schedule. 


Picture source: Twitter 

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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Alex joined Savings.com.au in 2019. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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