ANZ lifts rates for property investors

The bank has lifted its variable residential investment property loan rate due to the banking regulator's efforts to rein in investor lending growth.

ANZ has lifted interest rates for property investors in response to the banking regulator's efforts to slow investor lending growth.

The bank has lifted its variable residential investment property loan rate by 0.27 percentage points to 5.65 per cent due to a recent move by the Australian Prudential Regulatory Authority and "market conditions".

APRA has forced banks to restrict annual growth in lending to property investors to 10 per cent following a surge in investor loans in recent years.

ANZ's move will not impact variable rates for owner-occupied home loans or business loans and the bank has lowered fixed rates for owner-occupiers by 0.4 percentage points.

The head of the bank's Australian operations, Mark Whelan, said the decision to lift rates for investors was "difficult but necessary in the current environment".

"It allows us to balance the mix of our lending between owner-occupied and investment lending as well as the impact of changing market conditions," he said.

"This is a considered decision that takes into account our customers' position and the criteria we look at when setting rates including our competitive position, our regulatory obligations and the state of the residential property market."

The move comes after a report by Domain showed Sydney's median house price has pushed past $1 million after climbing almost 23 per cent in the past year.

Meanwhile, APRA earlier this week announced it would force the major banks to hold more capital against their mortgage books, in a move Reserve Bank governor Glenn Stevens says will push up interest rates on home loans.

The regulator will increase the average risk weighting for home loans from around 16 per cent to at least 25 per cent, which will require banks to hold billions of dollars in additional capital.

"I would imagine it will result in some rise in mortgage rates from the major banks - it's supposed to," Mr Stevens told a Sydney business lunch on Wednesday.

The change is designed to even the playing field between the big four banks - the Commonwealth, ANZ, Westpac and National Australia Bank - and smaller banks, which already have higher risk weights, and help shore up the financial system against future crises.

Source AAP

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