ANZ Bank has followed rivals in pushing up variable interest rates for property investors, blaming higher funding costs and its obligations to regulators.
The bank on Friday said property investor borrowers would face a 0.08 percentage point increase, with its benchmark rate for these customers increasing to 5.6 per cent.
More Domain Videos
- Video duration
- 00:32
What if interest rates go up?
What if interest rates go up?
Even a small hike can have a big effect on the hip pocket.
Up Next
Yarraville shines on bidders
- Video duration
- 01:18
- Video duration
- 01:18
Yarraville shines on bidders
Yarraville shines on bidders
A big crowd turned out for the auction of this Californian bungalow. Catch all the action from Domain's live auction coverage.
Up Next
Nail biting finish
- Video duration
- 01:17
- Video duration
- 01:17
Nail biting finish
Nail biting finish
This home on Sydney's lower north shore had aggressive bidding until the fall of the hammer. Catch all the action from Domain's live auction coverage.
Up Next
Things to look for at an open house inspection
- Video duration
- 01:09
- Video duration
- 01:09
Things to look for at an open house ...
Things to look for at an open house inspection
Here are 15 things that you shouldn't ignore when going to an open house inspection.
Up Next
Sydney's top sellers
- Video duration
- 00:56
- Video duration
- 00:56
Sydney's top sellers
Sydney's top sellers
The prestige market was on fire during 2016. Here's the top 10.
Up Next
The Christmas warehouse
- Video duration
- 00:55
- Video duration
- 00:55
The Christmas warehouse
The Christmas warehouse
Domain goes shopping for some Xmas treats.
Up Next
Commercial auction market
- Video duration
- 01:08
- Video duration
- 01:08
Commercial auction market
Commercial auction market
Why commercial properties are a serious investment option.
Up Next
Rates on hold
- Video duration
- 00:58
- Video duration
- 00:58
Rates on hold
Rates on hold
As widely expected, the RBA has left rates steady for December.
What if interest rates go up?
Even a small hike can have a big effect on the hip pocket.
Bendigo and Adelaide Bank also raised variable rates by 0.1 percentage points on Friday, changing rates for owner occupiers as well as investors.
The moves follow similar rises this week from National Australia Bank, Westpac, Suncorp and ING Direct, with all of the lenders also a pointing to a lift in their cost of funds.
Related Content
After a political backlash against banks following their skinny interest rate cuts in August, ANZ did not increase interest rates for owner-occupiers, a move that would probably reignite the political attacks on banks.
Banks' profit margins from housing lending have in recent quarters been squeezed by record low interest rates, prompting lenders to attempt to claw back profits through their lending to property investors.
"Despite residential investor rates remaining at historic low levels, this was a difficult decision that took into account increases in our funding costs and our regulatory obligation to manage a balanced portfolio," the head of ANZ's Australian arm, Fred Ohlsson, said in a statement.
The hikes follow a rise in bond yields, which can raise banks' costs, and recent strength in lending to property investors as house price growth accelerated in Sydney and Melbourne.
Under rules designed to prevent the property market from overheating, Australian lenders are subject to a 10 per cent a year cap on their housing investor loan growth.
"Customers concerned about the long-term direction of interest rates are able to take advantage of our competitive fixed rates that remain unchanged for both investors and owner-occupiers," Mr Ohlsson said.
5 comments
New User? Sign up