ANZ leaves variable rates unchanged but lifts fixed rates by 20 basis points

ANZ has left its variable mortgage rate unchanged at 7.36% today following its interest rate decision independent of the RBA.

However, it has lifted its three-year fixed mortgage rate by 20 basis points to 6.34%.

The fixed rate increase will cost new ANZ borrowers who take out the loan an extra $440 a year on the average $300,000 mortgage.

ANZ chief executive Australia Philip Chronican says the bank’s monthly pricing decisions remain “difficult”. 

“We are walking a tightrope between our customers’ interest in keeping rates as low as  possible and the commercial reality that while monthly funding costs go up and down, the upward trend is likely to continue as new funding is still coming on at a wider spread to the cash rate than the funding it is replacing,” he says.

“Given the structural shift that has occurred in the bank funding environment since 2008, including the additional cost of holding higher levels of capital and liquidity, we are working hard to ensure our commercial response helps our customers adjust and ensures we are competitive.

“Just as we absorbed part of the higher funding cost last month, and while funding pressures still exist, on balance we took the view that stability was important for our variable rate mortgage and small business customers this month."

Suncorp also lifted its fixed rates today raising its two-year fixed home loan rates by 16 basis points today to 6.14%.

Last month, 45 lenders increased mortgage rates independently of the RBA.

Bank of Queensland remains the only lender at time of writing to have lifted variable rates since Tuesday's RBA decision to leave rates on hold in March.