One of Australia’s major banks has fallen in line with the Australian Prudential Regulatory Authority’s (APRA) push to slow down lending to investors.

ANZ has announced that from Monday, 10 August its variable rate investment loans will increase by 0.27% to 5.65%pa (5.76%pa comparison rate), while fixed rate investment loans will increase by up to 0.30%.

Fixed rates for new owner-occupied home lending will be reduced by up to 0.40%.

RELATED: Commonwealth Bank follows suit with rate rise of their own

The increase comes in the same week Australia’s major banks were told by APRA to hold more capital against their mortgage books and ANZ Australia chief executive officer Mark Whelan said the decision to raise their rates was necessary.

“Although interest rates for residential property investors are at very low levels historically, the decision to raise interest rates for residential investment lending has been difficult but necessary in the current environment,” Whelan said.

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

“This is a considered decision that takes into account our customers’ position and the criteria we look at when setting rates including our competitive position, our regulatory obligations and the state of the residential property market.”

The bank said the interest rate decision was the latest in a series of measures it has implemented to improve its mix of investor and owner occupied lending, which has included reducing interest rate discounts, increasing the deposit required to at least 10% and increasing interest rate sensitivity buffers.