ANZ is raising its floating and fixed rate home loans between 35 and 65 basis points from Wednesday. Photo: 123RF
The country's biggest bank is assuring customers about to be hit by a rise in borrowing costs that it is ready to advise and support them.
ANZ is raising its floating and fixed rate home loans between 35 and 65 basis points from tomorrow after last week's large increase in the Reserve Bank's cash rate.
The bank's floating mortgage will rise 65 basis points to 7.99 percent, with its cheapest standard fixed rate being a 12 month loan at 7.14 percent.
ANZ managing director for personal banking Ben Kelleher said it had already been talking to nervous customers.
"People shouldn't be nervous about talking to their bank, we're here to support customers with the various options available to them," he said.
"There are steps you can take to manage your home loan and things you can do to help relieve some financial pressure."
ANZ has also raised its deposit rates between 40 and 70 basis points, with its highest being three to five year maturities at 5.2 percent.
Meanwhile, the bank's economics team is forecasting house prices to fall by a total of 22 percent from their peak, or by 32 percent, when adjusted for wages.
That would take house prices to about 10 percent below pre-pandemic levels in real terms.
They said they still expected a soft landing for house prices, although the outlook was more turbulent than previously thought.
"The fact that prices are down around 12 percent already puts us just over half-way through our forecast.
"We see the level of house prices finding a floor in the third quarter of 2023, not long after interest rates stop rising, with only very modest growth thereafter," ANZ economists said.