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ANZ, ING banks lift interest rates ahead of November RBA meeting


Two popular Aussie banks have hiked interest rates days before the Reserve Bank of Australia is forecast to set another increase.

ANZ, Australia’s fourth largest bank, increased its fixed rates by up to 0.35 percentage points for both owner-occupiers and investors on up to five-year terms on Friday.

ING also followed suite by hiking its new customer variable rates up to 0.08 percentage points and fixed home loan rates by up to 0.40 percentage points for owner-occupiers.

The central bank board will meet on Tuesday to consider increasing the cash rate.

The RBA has kept rates on hold for the last four months, with the last rise in June.

But another 0.25 per cent rise will lift the official cash rate to 4.35 per cent. research director Sally Tindall said there had been significantly more hikes than cuts to fixed rates over the last month across many banks.

“ANZ is not increasing fixed rates in a silo,” Ms Tindall said.

“Over the last month there have been significantly more hikes to fixed rates than cuts across the market, as banks factor in the rising cost of fixed rate funding.”

Ms Tindall said the latest ANZ rate increase meant the bank was now the most expensive options out of the big four banks’ lowest advertised fixed rates, with the exception of its two-year loan term.

“With just 4 per cent of new and refinanced loans opting for a fixed rate, banks aren’t going to take a gamble on underpricing these rates, as they’re unlikely to bring new business in the door,” Ms Tindall said.

“As a result of these changes, ANZ has gone from offering some of the sharpest fixed loans out of the big four banks’ lowest rates to some of the least competitive in this group.

“This is unlikely to be a sign ANZ is walking away from competition in the market because when it comes to fixed rates, there’s really no competition to talk of.”

However, these latest fixed rate hikes are unlikely a concern for borrowers.

The latest ABS lending indicator data revealed just 4 per cent of new home loans in September opted for a fixed rate.

This is in stark contrast to July 2021 when 46 per cent of new loans were at fixed rates.

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Joanna Swanson

Joanna Swanson is Europe correspondent at the Thomson Reuters Foundation based in Brussels covering politics, culture, business, climate change, society, economies and inclusive tech. With specific focus in breaking news, she has covered some of the world's most significant stories.