Variable Interest rates for ANZ customers are to increase by 0.06% as announced by ANZ today.
This announcement came after the monthly meeting of Reserve Bank of Australia for the month of February.
What are the Reserve Bank of Australia’s lending rates?
RBA interest rates are currently at 4.25%. RBA cut its rates in November by 0.25% and then again in December by another 0.25%.
There was criticism from bank customers when banks did not immediately lower their rates after RBA rate cuts in December.
What are the predictions for RBA rates in 2012?
There are also further expectations that RBA would be cutting its interest rates to 4% during the first half of this year.
Which types of loans are affected?
The types of loans impacted by ANZ decision to increase interest rates are variable home loans and small business loans.
However, there are still ways to save money on your mortgage.
Fixed rate home loans and business loans have been reduced.
ANZ has reduced their three year fixed mortgage loans by 0.15%.
How can you still save?
ANZ offers the Breakfree Package product for fixed interest rates.
Currently their three year interest rates under the Breakfree Package offer competitive rates at 5.99% p.a.
ANZ is competitive in the fixed rate market and this may stimulate some more competition with the other lenders.
When do the low interest rates for fixed rate loans become available?
The low interest rates for Breakfree Packages apply for loans drawn down from Monday, 13 February 2012.
Will other lenders follow?
It is predicted that other banks will also increase their interest rates.
The reason for this is, banks have been adversely affected by the back to back RBA interest rate cuts as well as from competition with each other.
RBA met this week and there were no interest rate changes announced despite expectations for RBA to cut interest rates.
For the lenders, keeping up with RBA rate cuts as well as lowering their rates to stay competitive in business has proven difficult to sustain.
When do the increased rates become effective
ANZ‘s increased rates for variable home loans as well as small business loans will be effective starting on 17 February 2012.