ANZ-Suncorp Transfer Could Raise Mortgage Payments

More than a million Suncorp customers are set to move to ANZ by 2027 after ANZ bought Suncorp in 2024, and hundreds of thousands of mortgage borrowers could see their minimum repayments rise by more than $1,000 a month.

The change affects how banks calculate minimum repayments. Suncorp lets customers with redraw and cashback facilities reduce their required monthly payment; ANZ doesn't offer that policy. Customers who take no action may face higher minimum repayments, depending on their loan balance, advance payments and remaining loan term.

What Changes for Borrowers

In an email sent on October 13, Suncorp warned customers: "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 indicated their home-loan repayments could rise by more than $1,000.

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." The changeover to ANZ is expected in June next year.

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. She agreed customers could avoid that outcome by following the instructions in Suncorp's email, explaining that the two banks calculate minimum repayments differently.

Tindall described the effect for a borrower with a $600,000 mortgage debt, 25 years remaining and $100,000 in extra funds in the loan. One calculation 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, that produces a monthly repayment of $4,047. The other approach calculates repayments on the $500,000 owing over the remaining 25 years, leaving a minimum monthly payment of $3,373.

Competition and the Acquisition

The Australian Competition and Consumer Commission initially rejected the acquisition, warning that reduced 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."

Keogh said those markets were critical to homeowners, Queensland businesses and farmers, and warned that reduced competition "will lead to customers getting a worse deal". The Australian Competition Tribunal later set aside the ACCC decision, while the Queensland and federal governments approved the acquisition.

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 while borrowers have little control over what they pay.

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."