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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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. 

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