ANZ is lifting interest rates on property investment loans, saying the move is designed to lower growth in the segment and comply with instructions from the bank regulator.

ANZ said its standard variable mortgage rate for residential property investors will increase 0.27 percentage points to 5.65 per cent per annum, effective from August 10.

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The bank said fixed rates for new residential investment lending will increase by 30 basis points.

ANZ said variable interest rates for owner-occupiers will not change, while it has cut fixed rates for this group for one-, two-, three- and four-year terms by as much as 40 basis points.

The bank’s Australia-New Zealand chief executive Mark Whelan said the move is designed to help ANZ comply with an Australian Prudential Regulation Authority (APRA) directive that investment lending grow by no more than 10 per cent per annum.

“It allows us to balance the mix of our lending between owner-occupied and investment lending as well as the impact of changing market conditions,” he said in a statement.

“This includes a decision to cut fixed rates for new owner-occupied home lending.”

ANZ said it is also reducing interest rate discounts, requiring a minimum 10 per cent deposit and imposing tougher rate stress testing on property investment borrowers.

-ABC