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ANZ April 2012 Interest Rate Review

- variable rates for mortgages and business lending increase by 0.06%pa -

ANZ today announced it will increase interest rates for variable rate mortgages and small business lending by 0.06%pa reflecting continued pressures on the cost of deposits and wholesale funding.


Key Points


  • Increased competition for deposits, particularly term deposits, is currently the most significant driver of rising funding costs.


  • Replacement of less expensive term wholesale debt is continuing to push up the average cost of wholesale funding.


  • Recent ANZ rate increases paced to assist customers to adjust to new environment while remaining competitively positioned with other major lenders.


Effective 20 April 2012, ANZ’s new standard variable mortgage rate will be 7.42%pa (7.52%pa comparison rate). New small business rates are also effective from 20 April.



The 0.06% increase will add $3.25 per week to the average home loan of $280,000 while the increase will add $1.50 per week to an average business loan of $130,000.


ANZ CEO Australia Philip Chronican said: “The funding environment changed quite dramatically in late 2011 as a result of the economic and financial crisis in Europe. This has seen wholesale funding costs rise and competition increase dramatically among banks for deposits.


“We accept our response to the new funding environment is difficult for some of our customers - even though deposit customers have benefited from better rates.


“Given this and the volatility we have seen in wholesale funding markets, we wanted to ensure these costs were sustained before we acted to pass them on. We also wanted to pace increases in a way that was manageable for our customers and ensured we were competitively positioned.


“Despite being the only bank that has committed to having a transparent process to review its lending rates, since we moved to reviewing variable rates each month ANZ customers have not been unfairly disadvantaged relative to the rest of the market. 


“Throughout that period, our variable rates for mortgages and business lending have been competitively positioned and even with today’s increase our rates continue to be competitive compared to other major lenders,” Mr Chronican said.


Today’s monthly interest rate review follows an announcement by ANZ in December 2011 that it would review variable rates for retail mortgages and small business lending on the second Friday of each month.


ANZ has options available to help customers concerned about interest rates manage their repayments. These include extending loan terms or switching to a fixed rate loan to provide greater certainty on future repayments, or to an ANZ Simplicity PLUS home loan, with fewer features at a lower interest rate. Customers who would like assistance should visit an ANZ branch or business centre, log on to anz.com, contact their relationship manager or call 13 13 14 (mortgage customers) or 1800 801 485 (business customers).


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