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Borrowers who have paid ahead on their mortgages could see their required repayments rise under Australia and New Zealand Banking Group’s (ANZ) calculation method, while customers with multiple offset accounts may no longer be able to use all of them to reduce the interest charged on their loans.
The concerns follow correspondence from Suncorp seen by Broker Daily, which warned that minimum loan repayments could increase “significantly”.
The originally Queensland-based bank stopped accepting new loan applications on 7 October as it continued its integration into ANZ, which completed its acquisition of Suncorp Bank in July 2024.
Jayden Vecchio, mortgage broker at Brisbane-based Hunter Galloway, told Broker Daily that Suncorp’s recent aggressive pricing had led many of his clients to choose the bank for its rates and features.
“Suncorp promoted those features, people set their banking up around them, and now they’re being taken away.
“I can understand their frustration.
“If they want to keep that set-up, they could be looking at another refinance, with more costs and paperwork so soon after settling.”
Double hit for borrowers
The changes centre on how ANZ calculates minimum repayments for borrowers who have paid ahead, and how savings held across multiple offset accounts will be treated after the migration.
Speaking on Broker Daily Uncut, Finni principal Eva Loisance explained that under Suncorp’s approach, borrowers with funds available in redraw could have their minimum repayments calculated on the amount they still owe after accounting for advance payments.
ANZ, by contrast, calculates repayments using the loan balance plus advance payments. This means some borrowers could face higher monthly commitments even if their interest rate remains unchanged.
“It’s not always common, but in some clients’ cases, they might have several hundred thousand in their redraw. That would then make a huge difference.”
Offset accounts are another concern.
Vecchio said multiple offsets were a popular budgeting tool among his clients, allowing them to separate their savings while still reducing mortgage interest.
“After the move, only the main linked offset will reduce interest. Moving everything there keeps the interest benefit but loses that set-up.
“As a hypothetical example, leaving $50,000 in accounts that no longer offset a loan at 6 per cent could cost roughly $3,000 extra interest a year if those figures stayed the same.”
Vecchio said borrowers with loans paid down to zero also needed to pay attention to the transition.
“Suncorp says loans with no outstanding balance, or in credit, will close after the move unless customers act beforehand,” he said.
“Someone might have paid their loan down to zero but kept redraw available for renovations or emergencies. If they don’t act before the move, the loan will close and that redraw access will be lost. They need to speak with Suncorp beforehand if they want to keep it open.”
He urged borrowers to review their options before the migration.
“I’d encourage borrowers to review their notice with their broker now. Check repayments, offsets and redraw, then compare staying against switching, including costs and the same remaining loan term. Refinancing won’t be worthwhile for everyone.”
Brokers question impact on competition and choice
The migration has also raised concerns about competition and consumer choice, with brokers pointing to the features that had attracted borrowers to Suncorp in the first place.
“Suncorp Bank has sharp pricing and a lot of great benefits,” Loisance said.
“It will be a shame to see them go because many people would want to go with them specifically.”
Recently, aggregator heads spoke to Broker Daily’s sister brand, The Adviser, about the importance of competition in the wake of the integration.
Vecchio said some borrowers had deliberately chosen Suncorp over other lenders.
“They chose Suncorp, and they’re now being moved onto ANZ products. I don’t think losing that independent choice is good for borrowers,” he said.
He also pointed to Suncorp’s Brisbane-based credit team and its understanding of the Queensland market as strengths that could be lost through the transition.
“In Queensland, Suncorp’s Brisbane credit team and local knowledge were real strengths – they understood the city, quirks with Queensland Health pay and local knowledge that comes from living and working out of Brisbane.
“My concern is whether we’ll lose that local understanding as everything moves across to ANZ.”
Vecchio added that some borrowers had chosen Suncorp for reasons beyond price and product features.
“I’ve also had a few clients choose Suncorp because of its fossil fuel lending restrictions. That mattered to them.
“ANZ’s policy allows some fossil fuel lending under its conditions, so those customers have another reason to review whether the new arrangement suits them.”
Malcolm Stedman, Suncorp Bank CEO, said: "We’re providing all lending customers with early notice of key changes that may take effect when they move to ANZ next year.
"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.
"By notifying customers early, we’re giving them time to understand their position, consider their options and take action to keep their repayments the same if they choose to.
"We’re providing access to a repayment calculator to estimate minimum loan repayments payable after the move and the opportunity to discuss their circumstances with us, to help give our customers confidence to make the right decision for their circumstances.
"As we prepare to move Suncorp Bank customers to ANZ, we’re committed to keeping customers informed well ahead of key changes that may affect them."
[Related: Brokerage fined for ‘exploitation of vulnerable workers’]
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