Major bank slashes owner-occupied rates, hikes investment rates

by Julia Corderoy24 Jul 2015
ANZ has announced interest rates for residential investment property loans will increase to manage investor lending growth targets and to respond to changing market conditions.

Effective Monday 10 August 2015, ANZ’s variable Residential Investment Property Loan Index Rate will rise by 0.27% to 5.65%pa (5.76% comparison rate). Fixed rates for new Residential Investment Lending will also increase by up to 0.30%, starting from 4.94% for a one-year fixed rate up to 5.14% for the three and four-year fixed rates.

There is no change to other variable lending rates including the standard variable rate for owner-occupied home loans or for business lending. However, fixed rates for new owner-occupied home lending will be reduced by up to 0.40%.

Effective Tuesday 28 July 2015, the four-year fixed rate for owner-occupied loans will be cut by 40 basis points to 4.74%. The two and three-year fixed rates will be reduced 30 basis points to 4.44% and 4.54% respectively. The one-year fixed rate will be slashed by 10 basis points to 4.54%. 

“Although interest rates for residential property investors are at very low levels historically, the decision to raise interest rates for residential investment lending has been difficult but necessary in the current environment,” ANZ CEO Australia Mark Whelan said.

“It allows us to balance the mix of our lending between owner-occupied and investment lending as well as the impact of changing market conditions. This includes a decision to cut fixed rates for new owner-occupied home lending.

“This is a considered decision that takes into account our customers’ position and the criteria we look at when setting rates including our competitive position, our regulatory obligations and the state of the residential property market.”

The major bank has also introduced a series of other measures recently to improve the mix between investor and owner occupied lending. For residential investment lending, these include reducing interest rate discounts, increasing the deposit required to at least 10% and increasing interest rate sensitivity buffers.


  • by Richard 24/07/2015 9:06:54 AM

    Given that the cost of funds is exactly the same for owner-occupied and investor lending interest rate premiums for investor loans is simply a cash grab my the majors. Play with LVR's but stop the silly propaganda. I hope current property investors at ANZ simply walk away.

  • by Chris C 24/07/2015 9:17:15 AM

    This profiteering from recent changes is across most Banks, particularly by the majors though but if the split between owner and investment debt is roughly 50/50, why don't the Banks do the right thing and increase the investment rate by 1/2 of the difference and reduce the home loan rates by the other 1/2 of the difference = same return to banks but still differentiates the debt (or correspondingly, increase deposit rates to match the investment rate increase)

  • by Macarthur Broker 24/07/2015 10:09:43 AM

    First phone call I had today was from an investor with three ANZ Loans begging me to get him out of there. $2m in ANZ Business about to walk out the door but I guess that is what they want. The changing investor loan landscape is a boon for brokers who are better placed then ever to help borrowers get a better deal.