ANZ-Suncorp Deal Puts Mortgage Borrowers at Risk

Suncorp customers could see their minimum mortgage repayments rise by more than $1,000 a month as their loans move to ANZ, which bought Suncorp in 2024. ANZ is shifting hundreds of thousands of borrowers to its loan platforms, with more than a million Suncorp customers set to move by 2027.

An email Suncorp sent customers on October 13 warned that borrowers with advance payments and funds available in Cashback or redraw could face higher minimum repayments at ANZ. One customer who contacted the ABC said the email suggested their home-loan payments could increase by more than $1,000. The size of any increase depends on the loan balance, advance payments and remaining loan term.

How the repayment changes work

Suncorp let customers with redraw and cashback facilities reduce their minimum monthly repayments. ANZ doesn't follow that policy, so some customers were told their minimum repayment could rise if they didn't act. The change is about how the banks work out the minimum due, not simply how much money a borrower has available in the loan.

Sally Tindall, director of data insights at interest-rate comparison site Canstar, said thousands of Suncorp customers could face an “unwelcome shock” when repayments change during the transition in June next year. Suncorp and ANZ calculate repayments differently, she said. Most banks exclude or discount extra payments or available cash when working out a minimum repayment.

Tindall gave the example of a $600,000 mortgage debt with 25 years remaining and $100,000 in extra funds in the loan. With one calculation, the minimum repayment 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, that means monthly repayments of $4,047. With another calculation, the bank bases the minimum repayment on the $500,000 owing over the remaining 25 years, giving a monthly minimum of $3,373.

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 said customers could avoid the increase by following the instructions in Suncorp's email.

Competition and customer protections

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.” Most Australians have a home loan that is “variable at the bank's discretion,” Turner said. That allows banks to raise fees or change conditions, while borrowers have little control over what they pay.

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

The Australian Competition Tribunal later overturned the ACCC decision, and Queensland and federal governments approved the acquisition. Asked about Suncorp's email, Queensland Treasurer David Janetzki said the former Labor government had agreed to the deal and former Treasurer Cameron Dick should explain why protections weren't included. The ABC said it had contacted the Queensland deputy opposition leader.

A spokesperson for Federal Treasurer Jim Chalmers said the decisions were commercial matters for ANZ, but added: “we expect the bank to treat its customers fairly and with respect, otherwise they'll look for better deals from others.”