ANZ lifts home loan rates

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David Koch shares his tips on how to prepare for higher interest rates.

ANZ has announced it is lifting its rates. Picture: AFP / Torsten Blackwood

ONE of the nation’s largest banks ANZ has lifted interest rates on home loan deals.

The bank has followed in the footsteps of rivals the Commonwealth Bank and Westpac, moving interest rates on both owner occupier and investor loans.

Some of the moves also include decreases and are effective immediately.

The moves come ahead of the Reserve Bank of Australia board meeting on Tuesday where it’s expected they will keep the cash rate on hold at 1.5 per cent.

Owner occupiers and investors signing up to interest-only fixed rate deals will be the worst hit with some hikes as high as 0.4 per cent.

MORE: Westpac increases fixed rates

RELATED: CommBank also raises fixed interest rates

The best fixed rate offers from Australia's major banks. Picture: Supplied, information provided by Mozo.com.au

The best fixed rate offers from Australia’s major banks. Picture: Supplied, information provided by Mozo.com.auSource:Supplied

On 2, 4, and 5 year fixed owner occupier interest-only loans the rates will rise by 0.4 per cent on the bank’s Breakfree products (this is one of the bank’s most popular products).

On one of the most popular fixed loans terms, three-year owner occupier interest-only loans will rise by 0.3 per cent to 4.49 per cent increasing repayments on a $300,000 30-year loan by $75 per month to $1123.

For investors on a three-year fixed-rate interest-only Breakfree deal the rate will rise 0.3 per cent 4.69 per cent, pushing up repayments by $75 per month to $1173.

For both owner occupiers and investors on principal and interest fixed rate deals rates on nearly all these products will fall.

Borrowers have been hit by fixed rates increases in recent weeks.

Borrowers have been hit by fixed rates increases in recent weeks.Source:Supplied

The three-year fixed rate owner occupier principal and interest deal will fall by 0.2 per cent to 3.99 per cent saving customers $34 per month and making repayments $1431.

On a three-year fixed rate investor principal and interest deal the rate will fall by 0.1 per cent to 4.44 per cent.

An ANZ spokesman said the “reflect our need to closely manage our regulatory obligations, portfolio risk and the competitive environment.”

Mozo spokeswoman Kirsty Lamont said the increases by ANZ are a result of the financial regulator, the Australian Prudential and Regulation Authority limiting their interest-only lending.

Mozo spokeswoman Kirsty Lamont said there’s increasing pressure on financial institutions to limit interest-only lending.

Mozo spokeswoman Kirsty Lamont said there’s increasing pressure on financial institutions to limit interest-only lending.Source:News Corp Australia

“It’s now more important than ever for interest only borrowers to do their homework on where to find the best rates in this current climate of tighter regulation,’’ she said.

“With the Federal Reserve jacking up rates in the US and inflation just scraping within the Reserve Bank target, we expect a cash rate increase in the next 12 months which means these fixed rates are unlikely to be around for a long time.”

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