ANZ has lifted the interest rate on its standard variable home loans by 39 basis points to 7.8 per cent. The changes will apply from Monday, November 15.
Last week RBA raised its official cash rate only by 0.25 per cent, however ANZ Bank's raise is lower than Commonwealth Bank's which lifted its variable home loan rates by 45 basis points to 7.81 per cent.
ANZ said the increase to its standard variable rate on home loans was due to the "sustained" rise in the cost of its funds in recent months. 39 basis points raise will add $77 a month to repayments on a 25-year, $300,000 mortgage.
In a move to sweeten the rise, ANZ announced it would abolish the exit fee on its mortgages, offer a 0.44-percentage-point discount on its current three-year mortgage rate until the end of this year and provide up to $1600 in fee discounts and subsidies until the end of the year to reduce "switching costs" for loans.
ANZ decision increases the likelihood that NAB and Westpac will follow their counterparts from Big Four and will raise home loan interest rates by more than the Reserve Bank's 25 basis-point official rate rise to cover the cost shortfall.
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