ANZ Makes Promise On Variable Mortgage Rates

Post by NeilMc on October 29, 2009 · Under Australian Economy, Business News, banking, home loans, interest rates, mortgages · Comment 

Australian banking major ANZ has promised its 800,000 variable rate mortgage borrowers that it will not impose interest rate rises in excess of official moves by the central bank.

The promise was made by ANZ chief Mike Smith, during an interview with the Herald Sun newspaper.

The pledge follows Federal Treasurer Wayne Swan’s warning, that it would be difficult to tolerate independent interest rate increases by Australian lenders in the current economic climate.

According to the Herald Sun, ANZ becomes the first of the majors, to confirm that it will not move its interest rates independent of the central bank rate cycle, until it is completely certain that Australia has recovered from the global economic downturn.

“I would be reluctant, frankly, to do anything until we really have to. I’m concerned we’re in a quite fragile stage of recovery (and) I’m reluctant to move above the Reserve Bank, right now, because I can’t see how it would be in the best economic interests of Australia.” Mr. Smith said.

ANZ’s pledge puts pressure on its rivals to pause plans to raise interest rates in excess of expected official rate hikes by the central bank over the next couple of months.

None of the other banks – NAB, Westpac and CBA have ruled out such moves.

The ANZ’s pledge does not apply to fixed rate mortgages which tend to be re priced on a weekly basis in response to money market movements.

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