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- ANZ the latest to hike new customer rates as banks move to shore up home lending books
ANZ the latest to hike new customer rates as banks move to shore up home lending books
ANZ has today increased the rate on its basic mortgage by up to 0.21 percentage points for new customers.
The bank has also increased the deposit size required to qualify for its lowest variable rate.
The move comes on the back of a similar change by CBA on Saturday. NAB also increased its new customer rate for its basic home loan option at the beginning of this month.
From today, customers looking to take out ANZ’s Simplicity Plus home loan will need a 40 per cent deposit to qualify for the bank’s lowest rate, up from the previous 30 per cent minimum, while borrowers with just a 10 per cent deposit will be required to pay 1.25 percentage points above this.
This means the bank’s required loan-to-value ratio (LVR) to qualify for the sharpest ANZ rate will be 60 per cent or less.
Existing customers are not impacted.
ANZ Simplicity Plus home loan changes - today
For owner occupiers paying principal and interest
| Old LVR required | Old rate | New LVR required | New rate | Change (% points) |
| - | - | 60% or less | 5.44% | - |
| 70% or less | 5.34% | 70% or less | 5.49% | +0.15 |
| 80% or less | 5.44% | 80% or less | 5.59% | +0.15 |
| Over 80% | 6.48% | 90% or less | 6.29% | -0.19 |
| - | - | Over 90% | 6.69% | +0.21 |
Source: RateCity.com.au.
Last week, Australia’s biggest bank CBA increased new customer rates on its basic home loan and created a new 40 per cent deposit requirement to qualify for the loan’s lowest rate (note: CBA’s new customer package rate is lower).
CBA Extra home loan changes – Saturday 25 March
For owner occupiers paying principal and interest
| Old LVR required | Old rate | New LVR required | New rate | Change (% points) |
| - | - | 60% or less | 5.52% | |
| 70% or less | 5.47% | 70% or less | 5.57% | +0.10% |
| 80% or less | 5.64% | 80% or less | 5.69% | +0.05% |
| Over 80% | 6.39% | 90% or less | 6.39% | 0.00% |
| - | - | 90.01% - 95% | 7.09% | +0.70% |
Source: RateCity.com.au.
As a result, three of the big four banks – CBA, NAB and ANZ – have increased select new customer variable rates in the past four weeks in addition to each bank’s standard RBA hike.
These three banks have also introduced new loan-to-value ratio tiers on select home loans in this time to attract customers with big deposits (note: NAB loan tier changes were on its standard variable rate.)
Risk based pricing – where the borrowers with the largest deposits are offered some of the lowest rates – is nothing new, however, it is increasing in popularity among lenders. RateCity.com.au’s database shows:
- 2 years ago, 36% of lenders reserved their lowest variable rates for new borrowers with deposits of over 20 per cent.
- Today, 59% of lenders reserve their sharpest rates for these borrowers.
RateCity.com.au research director, Sally Tindall, said: “In these volatile times, Australia’s biggest banks are trying to attract rock solid customers in a bid to strengthen their loan books.”
“ANZ CEO Shayne Elliott warned the bank would focus on protecting its balance sheet – this move is very much in line with this,” she said.
“We’ve now seen three of the big four banks quietly put up select new customer variable rates in a small but significant pivot away from the discounting that’s dominated the refinancing market for the last 10 months.
“The cost of funding has skyrocketed as central banks around the world hike official rates to drive down inflation. The aggressive discounts we’ve seen in recent months to attract new business is becoming increasingly difficult for the banks to sustain.
“While competition in the mortgage market might have passed its peak, relatively speaking it is still incredibly hot.
“The big banks still want new customers, they just want ones with big buffers to fall back on.
“New customers who don’t have a decent amount of equity behind them are likely to be slugged with a risky tax, at least from Australia’s biggest banks.
“Borrowers who aren’t in a strong equity position don’t have to cop it, but they will have to shop around.
“A total of six lenders are offering rates under 5.25 per cent to borrowers with deposits of less than 10 per cent – it’s just a matter of sifting through the competition to find them.
“That said, anyone taking out a new loan with a wafer thin deposit should think carefully about whether they have a large enough buffer to fall back on if they hit a bump in the road.
“At the end of the day, it is a risky move,” she said.
Current lowest variable rates for owner-occupiers paying principal and interest
9 of those that have announced March RBA hikes)
| Lender | Max LVR | Rate |
| The Mutual Bank | 60% | 4.94%* |
| QBank (certain occupations) | 80% | 4.95% |
| Bendigo Bank | 90% | 4.97% |
| Unloan | 80% | 4.99%* |
| G&C Mutual | 60% | 4.99% |
| Qudos Bank | 70% | 4.99% |
| Hume Bank | 60% | 4.99% |
| Bank of us | 80% | 5.04% |
| Tic:Toc | 90% | 5.04% |
| Gateway Bank | 75% | 5.04% |
| MOVE Bank | 80% | 5.04% |
| Bank of Sydney | 80% | 5.04% |
| Summerland Credit Union | 60% | 5.09% |
| Bank First | 60% | 5.09% |
| bcu | 60% | 5.09% |
| RACQ | 60% | 5.09% |
Source: RateCity.com.au. *The Mutual rate effective 1 April, Unloan effective 30 March.
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Product database updated 19 Nov, 2024
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