NAB and ANZ lift fixed interest rates

Hear that? That little cracking sound? As Sydney auction listings plummet and Fitch downgrades their outlook for Aussie banks, there’s some more interesting news to start the 2017 specufestor bonanza!

Two of the arms of Megabank, NAB and ANZ are lifting interest rates on their fixed rate mortgages. From Fairfax:

Two of the big banks have hiked fixed interest rates on home loans, and a senior banker at National Australia Bank says funding costs that drive variable interest rates “remain elevated.”

National Australia Bank on Monday said it would hike interest rates on two, three and four year fixed interest rates, following a round of hikes from ANZ Bank that took effect late last week.

NAB’s two year rate will lift by 23 basis points to 3.98 per cent, its three-year rate will rise 20 basis points to 4.09 per cent, and its four-year rate will jump 60 basis points to 4.59 per cent.

On Friday, ANZ increased rates on two-year loans by 23 basis points to 3.9 per cent, and three-year loans 4 per ent. ANZ reduced its four year fixed rate by 10 basis points to 4.74 per cent.

The banks are hiking rates for both owner-occupier loans and loans for property investors. Even so, there has been speculation among analysts that banks may also increase their variable interest rates that most borrowers pay in 2017, in response to higher funding costs.

The bottom line must be defended!

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  1. Next comes the drop in short term deposit rates as the banks try to herd customers into the Term Deposit ring before those rates too go up.

    • Do you mean they will drop rates for 3 and 6 months term deposits to push people into 12months and longer, so they have access to those funds cheaper for longer, because its expected short term rates will have to rise soon ?

    • There was a news article in mid-December highlighting the growth in the movement of cash out of banks and into online P2P lending platforms, where lenders can achieve higher returns (albeit unsecured) than what their bank accounts / TDs are offering.

      Over the past week, I just placed $150k on loan via ratesetter. On average, I achieved a 4.2% annualised return for loans of 1 month duration. 1 year was offering in the vicinity of 5%.

      If this trend continues, banks will leak cash from their stable and loyal customer base, and greater pressure will be placed on margins and the bottom line. P2P lending is still in its infancy in Australia, but project forward 2 – 3 years and I reckon the banks will have true competition on their hands.

      • Could you provide a link or more info on this rate setter platform, and how much of a risk do you think it is ?

      • Ronin8317MEMBER

        Just be very careful with those P2P lending platforms. A lot of the P2P lending in China turns out to be Ponzi schemes.


        It is the Australian subsidiary of a UK parent, that has been operating for about 5 years. The key feature of Ratesetter is what they call the ‘provision fund’ which is used to payout bad debts to lenders. They are very transparent with their data and key indicators, so you can see the ‘at risk’ loans and history of bad debts.

        The grandfather of this model is ZOPA, also UK based, and they have reached over GBP 1 bil in loan origination.

        The Australian based businesses are emerging with Society One being the most prominent.

  2. *As Sydney auction listings plummet*

    Based on a tiny amount of data from the first two weeks in January, which is meaningless raised to power irrelevant, multiplied by bad joke.

    • Yuh, auction results over the last few weeks mean nothing, but it will be rising interest rates that pop this pimple.

      Even then they’re sub-4%, which is laughable.

      • Good point but this still maybe a sign for things to come – time will tell. This is in regards to the volumes comment.

        “Even then they’re sub-4%, which is laughable.” – In regards to the interest rates we have a different environment.
        First, there are lot of households that have borrowed to their eyeballs – means even small hikes, 2x 0.25% and lot of them will be under water and all of them will stop spending and start saving. Buyers will be gone – means even lower volumes.
        If the FED hikes early, and for that I mean before June, than RBA will be left with only 1 or 2 cuts at best.
        There is not enough ammunition to revive a slowing economy. And the economy can slow down for many reasons this year. We may scrape it to the end of the year and that is if there is no major shock from China. If China goes off then god help us.

        Chinese Herd may decide Clean Air n Norway, Russia, Sweden etc may be healthier and perhaps cheaper Holiday Option than our Gold Coast..
        Coal and IO may start to trade where fundamentals..
        FED may hike before June and another time before Dec..
        Trade war between US and China with Oz taking US side..
        China may actually manage to stop the outflow and Chinese Students 1/2 in volume and Chinese RE investors are nowhere to be found..
        Auto Shut in combination with only one of the above.. Tell Me it is not a real possibility please.

      • I follow 3 post codes for the last 3 years… 2152, 2153, 2154.
        All showing vacancy rates at levels unseen since SQM public data collection start (since Jan 2005).

        true indicators will be areas like inner west council…

    • My thoughts immediately. Surely MB are not silly enough to be thinking the first few weeks of Jan represent anything in the property market? We need to wait until feb at least to see any real data present itself.

      • Even last January at 24 is quite a small number so halving that to 12 isn’t that significant.

    • Variable rates are already going up. Over the last month I’ve seen (in my job as data manager for a banking product comparison site) a huge number of lenders increasing variable rates or removing their better discounts.

  3. Jumping jack flash

    For new fixed rate loans only?
    When they start hiking rates on existing variable rate loans is when I sit up and take notice.

    This is probably moot because those necessary foreign investors holding up the prices that the trillions of dollars’ worth of debt bubble is secured against don’t need to (or possibly can’t) take on supplemental debt from the big 4 anyway.

    While we have a steady supply of them all is good. With mostly stagnant wages, most Australians are maxed out or simply can’t afford the fee (deposit) to enter the ponzi.

  4. Could rising fixed rates explain the sudden surge in specufester loans? Locking in before they go higher still?

    I still shake my head at this logic. This isn’t America where you can lock in for 25yrs. What happens when your 2yr lock drops out and you’re exposed to rates substantially higher? Pray everything will be alright? Pray there are a hundred foreigners waiting to pounce on your property as you’re forced to sell?