ANZ’s Suncorp Takeover Could Raise Borrowers’ Payments

Suncorp customers could see minimum mortgage repayments rise by more than $1,000 a month as ANZ moves their loans onto its platforms. ANZ bought Suncorp in 2024, and more than a million Suncorp customers are due to move to ANZ by 2027.

For borrowers with advance payments or money in redraw and cashback facilities, the shift could mean a higher required monthly payment, even if they owe less than their original loan balance. In an email to customers on October 13, Suncorp said: “If you've made advance payments and have funds available in your Cashback/redraw, your minimum loan repayment at ANZ is likely to increase.” One customer who contacted the ABC said the email suggested repayments could rise by more than $1,000.

A different calculation, a different bill

Suncorp let customers with redraw and cashback facilities lower their minimum monthly repayments. ANZ doesn’t use that policy, and some customers were warned their minimum payments could climb if they took no action. The email said any increase would depend on the loan balance, the amount paid in advance and the remaining loan term.

Sally Tindall, director of data insights at interest-rate comparison site Canstar, said thousands of Suncorp customers could face an “unwelcome shock” when minimum repayments rise after the changeover to ANZ in June next year. Suncorp said customers could avoid an increase. Suncorp Bank CEO Malcolm Stedman said: “For most customers there will be no change to their repayments. Those customers ahead on their repayments may see an increase in their minimum repayments, if they choose to take no action.” Tindall agreed customers could avoid the increase by following Suncorp’s email instructions.

The difference comes down to how the banks calculate the minimum due. Tindall said most banks exclude or discount extra payments or available cash when they work out that minimum.

Here’s her example: a $600,000 mortgage debt with 25 years remaining and $100,000 in extra funds. Under one method, the minimum payment is based on the $600,000 debt, while interest applies to $500,000. At an average owner-occupier variable rate of 6.49 per cent, the monthly payment would be $4,047. Another method bases the payment on the $500,000 owing over the remaining 25 years, giving a minimum of $3,373.

The regulator warned of weaker competition

The Australian Competition and Consumer Commission initially opposed ANZ’s acquisition, saying less competition could disadvantage consumers. In August 2023, ACCC deputy chair Mick Keogh said: “We are not satisfied that the acquisition is not likely to substantially lessen competition in the supply of home loans nationally, small to medium enterprise banking in Queensland, and agribusiness banking in Queensland.” He said those markets mattered to homeowners, Queensland businesses and farmers, and that reduced competition “will lead to customers getting a worse deal”.

The Australian Competition Tribunal later overturned the ACCC decision. Queensland and federal governments approved the acquisition. The competition warning and the transfer of hundreds of thousands of borrowers now accompany the bank’s change to repayment calculations.

Responsibility passes between officials

The ABC asked Queensland Treasurer David Janetzki about Suncorp’s email urging customers to adjust repayments to avoid higher costs. He said: “This deal was agreed to by the former Labor government and it is up to former Treasurer Cameron Dick to explain why these protections weren't included in the arrangement.” The ABC said it had contacted the Queensland deputy opposition leader.

A spokesperson for Federal Treasurer Jim Chalmers said: “While these are commercial decisions for ANZ we expect the bank to treat its customers fairly and with respect, otherwise they'll look for better deals from others.” For customers facing a changed minimum payment, the immediate issue remains the terms and calculations attached to their loans—and which institution sets them.