By lifting it's floating mortgage interest rate 10 basis points ANZ will make an extra $12 million in profit, one expert says. Photo: AFP
The head of one of New Zealand's biggest mortgage broking firms has taken aim at the country's biggest bank for its latest interest rate increase.
ANZ last week lifted its floating home loan rate by 0.1 percent.
That takes it to 5.79 percent.
Squirrel chief executive David Cunningham said the lift would mean an extra $12 million in profit for the bank each year.
He said the rate had previously been in a "no man's land" between Kiwibank and the other major lenders - not the cheapest on offer, but not the most expensive either.
"Why have your floating rate lower than the bulk of your competitors? Just quietly put it up and go 'we may as well just take a bit more profit'. It's as simple as that."
Cunningham said all other major influences on home loan rates had remained the same since ANZ last changed its floating home loan rate on 26 November, so it seemed that market conditions were the sole driver of the move.
He said it would also help to fund the bank's 1.5 percent cashback offer for new home loan customers, which had been extremely popular. One Squirrel customer had received more than $30,000.
"For mortgage brokers it was sort of a gold rush, almost everyone that had the opportunity took it ... even as mortgage advisers, where we see a lot happening, we were pretty gobsmacked when we saw ANZ come out with that."
He said banks were now competing with cash back rather than better interest rates, which meant those who did not move missed out.
Customers should "play the game" when they could and move banks to earn cash back when it was available, he said.
A spokesperson for ANZ said it was committed to offering competitive home loan rates.
"Since the OCR began to fall in August 2024, we've lowered our floating rate by 2.95 percent, more than any of the other main banks.
"On Tuesday we announced a small change to our floating and flexi rates to align with market conditions.
"Ahead of the November OCR cut, our floating rate was already below most of the main banks, our new rate remains competitively positioned among the main banks in the market today.
"We'll continue to review rates as global and local conditions evolve."
Cunningham said the New Zealand banking system was hard to break into because the existing banks could adjust prices across their range to alter what profit they made.
"You've always got a bunch of products you can compete to protect your margin.
"Whereas if you're a mono-line provider and the competition turns to fixed rate loans and you haven't got a floating rate loan to subsidise it or a credit card or a personal loan at a high margin or cheap deposits to subsidise it... that's why the system is so resilient against attackers."
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