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ANZ, CBA follow rivals with mortgage hikes

ANZ and Commonwealth Bank have raised mortgage rates, with all four of Australia’s big banks now having moved out-of-cycle since the US Federal Reserve hiked its cash rate last week.

Both lenders raised variable rates for investor and interest-only mortgages, while Commonwealth Bank also lifted its owner-occupier variable rate by 0.03 percentage points to 5.25 per cent per annum.

ANZ left its owner-occupier rate unchanged at 5.25 per cent.

Smaller players Bendigo Bank and St George Bank also announced rate increases on Friday afternoon.

The hikes come amid speculation that the Australian Prudential Regulation Authority could tighten investor lending standards in an attempt to rein in Sydney and Melbourne housing price growth.

“These changes reflect a need to closely manage our regulatory obligations, our portfolio risk and the competitive environment,” ANZ Australia group executive Fred Ohlsson said in a statement on Friday.

National Australia Bank and Westpac lifted their rates last week.

ANZ’s investor loan rate will rise by 0.25 percentage points from next Friday to 5.85 per cent, while new interest-only investor loans will rise by 0.36 percentage points to 5.96 per cent and new owner-occupier interest-only loans will rise by 0.20 percentage points to 5.45 per cent.

CBA’s standard variable rate for interest-only owner-occupier loans will increase by 0.25 percentage points to 5.47 per cent, its investor variable rate by 0.24 percentage points to 5.80 per cent, and its interest-only investor rate by 0.26 percentage points to 5.94 per cent.

Matt Comyn, CBA’s group executive for retail banking services, blamed “rising costs and regulatory responsibilities” for the changes, which come into force on May 8.

ANZ’s interest-only rates will increase on April 22 for new loans, while those for existing customers go up in late July.

Both ANZ and CBA are hoping customers making interest-only repayments switch to less risky principle-and-interest repayments.

St George will lift its variable interest-only home loan for owner occupiers by 0.08 percentage points to 5.50 per cent, while interest-only investor loans will rise by 0.31 percentage points to 5.98 per cent.

Variable residential investment loans will increase by 0.23 percentage points to 5.78 per cent, with all changes effective from May 8.

Bendigo Bank lifted its variable interest rate on investor loans by 0.25 per cent to 6.01 per cent, with the change effective from March 31.

The bank also cut its its loan-to-valuation ratio on residential investor loans to 80 per cent, from 90 per cent previously.

Minutes of the Reserve Bank board’s March meeting, released this week, noted “a build-up of risks associated with the housing market”.

The Reserve Bank held its rate steady but several economists described the language as the bank’s strongest yet on the issue, with some interpreting it as a call to APRA to take action.

THE BIG FOUR’S VARIABLE RATES

OWNER-OCCUPIER PRINCIPAL AND INTEREST

* ANZ: 5.25pct

* CBA: 5.25pct

* NAB: 5.32pct

* WBC: 5.32pct

INVESTOR PRINCIPAL AND INTEREST

* ANZ: 5.85pct

* CBA: 5.80pct

* NAB: 5.80pct

* WBC: 5.79pct

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