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Rate decision - 24 March 2017

Update on ANZ Interest Rates

ANZ today announced an update on variable home loan and business loan interest rates.

Variable interest rates for the 80% of owner-occupier borrowers who repay principal and interest on their standard variable home loan remain unchanged at 5.25% p.a.

 

Effective 31 March 2017, we will increase the variable interest rates for all investor home loans and ANZ Equity Manager accounts:

  • ANZ Standard Variable Residential Investment Loans for investors will increase by 0.25% p.a. to 5.85% p.a.
  • ANZ Equity Manager will increase by 0.25% p.a. to 6.07% p.a.
  • For business borrowers, Business Variable Rate Indices will increase by 0.08% p.a.

Effective 22 April 2017, we will introduce new variable rates (indices) for new lending with interest only repayments:

  • ANZ Standard Variable Home Loans for owner-occupiers will increase by 0.20% p.a. to 5.45% p.a. for customer making interest only repayments
  • ANZ Standard Variable Residential Investment Loans for investors will increase by a further 0.11% p.a. to 5.96% p.a. for customers making interest only repayments
  • ANZ Simplicity PLUS Home Loans for owner occupiers will increase by 0.20% p.a. to 4.75% p.a. (excludes 0.52% p.a. special offer discount) for customers with interest only repayments
  • ANZ Simplicity PLUS Residential Investment Loans for investors will increase by 0.20% p.a. to 4.75% p.a. (excludes 0.25% p.a. special offer discount) for customers with interest only repayments

Existing Lending with interest only repayments

From late July, indices applied to new lending will apply to existing investor and owner-occupier home loan customers who choose to repay interest-only.  ANZ will be writing to existing interest-only variable home loan customers from May to provide them with advance notice of the change and the option of switching to repay principal and interest on their loan at the lower interest rate without incurring the renegotiation fee before the interest only change takes effect.

Home loan products no longer available for sale (Home Equity Loan and Money Saver) will also increase by 0.25% p.a.

 

Why is ANZ making these changes?

We regularly review interest rates to ensure they reflect current economic and market conditions.

Introducing home loan rate pricing according to loan purpose and repayment type will help us to:

  • regulate flows into loans with different purposes and repayment types
  • manage portfolio risk
  • maintain prudent lending practices, and
  • meet regulatory guidelines.

I would like more information. Who can I speak to?

If you would like more information, visit any ANZ Branch, call us on 13 13 14 or refer to our interest rates page, which will be updated on 31 March and 22 April to reflect these changes.

ANZ's review of interest rates

The five key criteria we base our decisions on are:

  1. Ensuring attractive returns for depositors: ANZ is committed to providing customers with competitive returns and absolute security for their savings.
  2. The cost of wholesale funding: This covers the interest we pay on funds we borrow from wholesale money markets.
  3. Our competitive position: ANZ is determined to remain competitive by attracting customers, winning business and managing our costs.
  4. The impact of market conditions on our customers: We are committed to lending responsibly and giving consideration to the financial health of our customers, the economy and the banking system in Australia.
  5. Regulatory requirements: As a bank, ANZ works within a strong prudential and regulatory environment. For example, we must hold capital reserves and levels of liquidity to operate safely and securely for customers.

Communicating these criteria helps us better explain our future decisions on interest rates to customers.

The interest rate review applies to variable interest rate home loans and residential investment loans.

How does this affect customers?

Depending on loan type and the method by which you usually make repayments, your repayment may be automatically changed. You will be notified if this is the case.

If rates change and the amount of your required regular repayment changes, we will give you written notice outlining:

  • the new minimum repayment amount
  • when it will take effect
  • any action you are required to take.

Note: If interest rates change and your minimum repayment amount goes down, you can choose to do nothing and keep paying the same amount and pay off your home sooner. Or, you can choose to reduce your repayment amount.

If you wish to change your loan repayments yourself at any time, you can do so as follows:

  • If you make your payments via a Direct Loan Payment from an ANZ account, adjustments can be made via Internet Banking or by calling 13 25 99 8.00am and 8.00pm (AEST), Monday to Friday
  • If you make your payments via a transfer from an account held at another financial institution, or by salary deduction through an employer, you will need to provide instructions to your financial institution or your employer to change repayments to reflect the new repayment amount.
  • If you make your payments via an ANZ deposit book, you can visit the nearest ANZ branch.

ANZ will announce the effective date at the same time as we announce the change in rate.

Please contact us so we can review your situation and explore the available options. More information can be found at our dedicated Hardship online site on anz.com.

The Australian market is highly competitive, which can be seen in the difference between the variable interest rates of banks.

In addition to the major banks, there are over 100 other home loan providers in the market, offering a total of more than 500 home loan products.

As a bank with more than 6 million Australian customers, we need to make sure we balance the needs of both borrowers and depositors. This means providing competitive and affordable interest rates, innovative products and flexible options that give customers confidence and control over their finances.

As one of Australia’s top five listed companies, we also have a large and diverse shareholder base, including retirees and superannuation holders, who rely on ANZ to deliver a competitive return on their investments.

To do this on a consistent basis means we need to attract customers, win business, manage our costs and remain competitive in the market.

The market is highly competitive, which can be seen in the difference between the variable interest rates of banks. In addition to the major banks, there are over 100 other home loan providers in the market, offering a total of more than 500 home loan products.

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