‘s mortgage war is heating up with ANZ cutting variable rates – even though the Reserve Bank isn’t expected to provide any relief until next year.
ANZ has trimmed its most competitive home loan rate by five basis points – taking it down to 6.09 per cent for new customers – the lowest among the banking giants for a variable rate.
This Big Four bank has also cut its ANZ Plus mortgage rate a week after NAB also cut its variable rates, and three months after the Commonwealth Bank provided similar relief to borrowers.
Canstar data insights director Sally Tindall said ANZ’s move showed the major banks were fighting for new customers even without the Reserve Bank cutting rates.
‘This is the third big bank to have sliced new customer variable rates in the last three months despite no move to the cash rate,’ she said.
‘This is confirmation the big banks are still fiercely competitive.’
While the low rate is only for new customers, Ms Tindall said existing ANZ customers could still haggle if they were owner-occupier borrowers paying off principal and interest.
‘If you’re an existing ANZ customer, know the rate cut won’t be automatically applied to your loan, but there’s no harm ringing up the bank and asking for it to be,’ she said.
‘After all, if you’re a loyal customer, why should you be the one on a higher rate?’
ANZ already had the lowest variable rate even before Friday’s announcement on its digital-only mortgage, and is also offering cash back to borrowers as it chases market share.
‘The bank is also one of a small handful of lenders still offering a cashback to refinancers and first home buyers, in a clear sign it’s voraciously hungry for new business,’ Ms Tindall said.
ANZ’s latest move is all the more remarkable with Westpac and NAB not forecasting an RBA rate cut until May as ANZ and CBA predict relief in February.
The Commonwealth Bank is charging 6.15 per cent on its lowest variable rate while NAB and Westpac have 6.44 per cent rates.
But borrowers wanting an even lower rate starting with a ‘five’ have to opt for a fixed mortgage rate.
They would be worthwhile if the RBA hardly cut rates in coming years, but if the Reserve Bank embarked on deeper cuts, borrowers on a fixed rate would be liable for very expensive exit fees if they wanted to switch to a lower variable rate.
ANZ offers a 5.74 per cent rate for those who fixed their loan for two or three years – making it the lowest among the Big Four banks.
ANZ and Westpac offer the equal-lowest four-year fixed rate of 5.89 per cent.
In November, 12 lenders have cut at least one variable rate, a Canstar analysis showed.
The 30-day interbank lending market isn’t expecting any RBA rate cut until July with no follow-up rate cut until February 2026 – each in increments of 25 basis points or half a percentage point.
That also means borrowers will have to wait for official relief from the Reserve Bank’s 13 rate rises in 2022 and 2023 that took the cash rate to a 12-year high of 4.35 per cent.
This is despite borrowers already getting central bank relief in the U.S., UK, Canada, New Zealand and the European Union.
Headline inflation in September fell to a three-year low of 2.8 per cent – putting it within the Reserve Bank’s 2 to 3 per cent target.
But the Reserve Bank regarded this as the result of one-off $300 electricity rebates that expire in June next year, along with cheaper petrol prices.
Without those volatile items, underlying inflation was higher at 3.5 per cent, meaning the RBA is in no rush to help borrowers even if the big banks are.