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The major bank has announced that it will extend the maximum loan term on business loans under $1 million to 30 years.
ANZ has announced that it will extend the maximum loan term on ANZ Business Loans under $1 million from 15 years to 30 years, when secured by suitable commercial property.
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The change will be effective from 1 June 2020, however is not applicable to Business Mortgage Loan, Agri Finance Loan and Asset Finance loans.
Term changes on ANZ Business Loans will be subject to eligibility and credit criteria, including:
- total credit facilities with ANZ, including new loan funds as part of the application and any credit facilities held by related entities, must be less than $1 million; and
- provision of security acceptable to ANZ, meeting ANZ's security requirements including minimum security coverage and suitable security location.
According to ANZ, this may provide customers with an alternative to using residential property as security for their loan, and give customers “more choice to help them run or grow their business”.
The bank made note that the total cost to borrowers for an extended term loan of up to 30 years will be higher than a shorter term loan, and will usually result in:
- a lower amount of principal being repaid in each regular repayment; and
- the total amount of interest payable being higher than a shorter term loan as a result of the longer loan term during which interest is paid.
The news comes days following an announcement that ANZ was raising two-year fixed rates on home loans by 10 basis points, bucking the trend of other lenders lowering their rates.
The bank’s two-year Fixed Home Loan rate has increased from 2.34 per cent to 2.44 per cent (comparison rate 4.10 per cent), effective 22 May 2020.
[Related: Major bank hikes fixed rates amid turnaround time debacle]
