Suncorp Borrowers Face $1,000 Rise After ANZ Takeover

A Suncorp email sent to customers on October 13 warned that if you've paid ahead on your mortgage, your minimum repayment at ANZ is “likely to increase.” One borrower who contacted the ABC said the message indicated their home-loan repayments could rise by more than $1,000.

The warning comes as ANZ, which bought Suncorp in 2024, shifts hundreds of thousands of borrowers from Suncorp’s books onto ANZ loan platforms. More than a million Suncorp customers are due to make the switch by 2027.

Who Is Affected

The customers most exposed are those who did the right thing. Suncorp let borrowers with redraw and cashback facilities reduce their minimum monthly repayments. ANZ doesn’t have that policy. People who’ve built a buffer by paying ahead could therefore see their minimum repayment climb if they take no action. The increase will 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 with the changeover to ANZ in June next year. She said Suncorp and ANZ calculate minimum repayments differently. Most banks, she explained, exclude or discount extra payments or available cash.

Her example puts the difference in dollars. Consider a $600,000 mortgage with 25 years remaining and $100,000 in extra funds in the loan. One method bases the minimum repayment on the $600,000 debt while charging interest on $500,000. At an average owner-occupier variable rate of 6.49 per cent, the monthly repayment would be $4,047. If a bank instead calculates the repayment on the $500,000 owing over the remaining 25 years, the minimum monthly repayment is $3,373. That’s a gap of $674 a month for the same household and loan.

Official Response

Suncorp says borrowers can avoid the problem. 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 an increase by following the instructions in Suncorp’s email.

Still, borrowers have to act. Consumer Policy Research Centre CEO Erin Turner said: “Australians deserve better protections in the mortgage market to give them more certainty about what they will pay and the conditions for their loan.” Turner said most Australians have a home loan that is “variable at the bank’s discretion”, allowing banks to raise fees or change conditions. Borrowers, she said, have little control over what they pay.

The Competition Warning That Was Overruled

The ACCC first rejected the deal. 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 and Queensland businesses and farmers, and that reduced competition “will lead to customers getting a worse deal”.

The Australian Competition Tribunal later set aside the ACCC decision. The Queensland and federal governments approved the acquisition.

Now the politics is turning on who owns the outcome. Asked by the ABC to respond, Queensland Treasurer David Janetzki 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.”

Why This Matters:

In August 2023, the regulator warned that the deal would leave customers with a worse deal. Three years on, borrowers are being told to check their paperwork and act before June or pay more. The Federal Treasurer’s office says it expects fair treatment but calls the matter a commercial decision, while the Queensland government points to its predecessor. Meanwhile, households carry the risk. Turner’s point about loans that are “variable at the bank’s discretion” goes to the heart of it: when a lender changes the rules, customers have little recourse. More than a million Suncorp customers are due to move by 2027, and the case tests whether competition and consumer protections in mortgage lending can shield people who simply followed the rules of the loan they signed.