ANZ hikes fixed home loan rates, UBank lowers variable

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on December 10, 2021 Fact Checked
ANZ hikes fixed home loan rates, UBank lowers variable

In a game of snakes and ladders, UBank on Friday cut a variable home loan by 20 basis points, while ANZ hiked by as much as 50 basis points.

On Friday, UBank announced its 'lowest ever'  variable rate for owner occupiers.

The new rate for those paying principal & interest (P&I) is:

  • UHomeLoan up to 80% LVR - Cut 20 basis points to 1.99% p.a. (1.99% p.a. comparison rate*). 

UBank CEO, Philippa Watson, said this is the lowest variable rate UBank has offered in its 13-year history.

"With new data showing the average family spends 36.2% of their income on loan repayments – the highest level since the market emerged from the global financial crisis in 2008 – it’s more important than ever for customers to review their current rate and check how much they could be saving," Ms Watson said.

UBank's new variable rate offering is a limited time offer, available for new applications received online from 10 December until 31 January 2022 that settle by 1 May 2022.

ANZ hikes fixed rates

Following on from fellow big four banks lifting fixed interest rates over the past couple weeks, ANZ has increased various Residential and Investment Fixed interest rates on Friday by up to 50 basis points.

Notable changes across the big four bank's home loan portfolio include:

  • Breakfree Residential Fixed 4 Years 80-90%: Increased 40 basis points to 3.44% p.a. (3.70% p.a. comparison rate*).
  • Residential Fixed 4 yrs ≤80%: Increased 40 basis points to 3.54% p.a. (4.17% p.a. comparison rate*).
  • Breakfree Investment Fixed IO 4 yrs ≤80%: Increased 50 basis points to 3.89% p.a. (4.07% p.a. comparison rate*).
  • Investment Fixed IO 4 yrs ≤80%: Increased 50 basis points to 4.04% p.a. (4.74% p.a. comparison rate*).
  • Investment Fixed 4 yrs ≤80%: Increased 40 basis points to 3.74% p.a. (4.63% p.a. comparison rate*).

These increased rates apply to new lending with a loan-to-value ratio of 80-90% for owner occupiers and investors.

ANZ in hot water: The final nail in the Royal Commission coffin

Corporate regulator ASIC has sued ANZ for misleading customers and failing to provide promised benefits, primarily within the 'Breakfree' product line of packaged home loans.

Between the mid-1990s and September 2021, ANZ failed to provide certain benefits, including fee waivers and interest rate discounts to more than 580,000 customers.

This has resulted in a $200 million collective blow to impacted customers.

ANZ conceded the charges, and both the major bank and ASIC agreed on a penalty of $25 million.

ASIC deputy chair Sarah Court said this marks the final investigation by ASIC arising from matters considered by the Financial Services Royal Commission.

"This case is yet another example of a widespread system failure by a major bank impacting thousands of customers," ASIC deputy chair Sarah Court said.

"ANZ’s conduct was long standing and impacted over half a million customers.

"These customers were entitled to receive the benefits they signed up for and in many instances paid for."

Introduced in 2003, the 'Breakfree' package series was singled out, with ASIC alleging these purported package benefits were not always provided to customers.


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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%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of June 25, 2022. View disclaimer.


Image by UBank.

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Jacob Cocciolone joined the Savings team in 2021 as a Finance Journalist. Driven by a passion for keeping Australians up to date with the latest financial news and trends, his areas of interest include financial technology, investing, property and motoring.

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