October 11th 2024.
After holding out for a few weeks longer than its competitors, ANZ has finally decided to cut fixed rates on its home loans. This move comes as no surprise as the other major banks had already made similar cuts earlier. According to Canstar's analysis, the bank has lowered its rates by up to 0.70 percentage points across its one- to five-year terms.
NAB was the first to announce rate cuts on October 8, followed by CBA on August 23 and Westpac on August 21. It seems that ANZ was the last to join in on the trend. "For months, ANZ resisted changing its fixed rates while the other major banks were busy making cuts. But they have finally made the chop," said Canstar's data insights director Sally Tindall.
ANZ's cuts include a reduction of up to 0.60 percentage points for owner-occupiers and up to 0.70 percentage points for investors. The bank's lowest fixed rate now stands just below 6 per cent. For owner-occupiers who are paying principal and interest with a 20 per cent deposit, the eligible rate for two- and three-year terms is 5.99 per cent.
Canstar's data shows that in the past month, 42 lenders have slashed their fixed rates. The current lowest fixed rate in the market is 4.99 per cent for a three-year term with SWS Bank. However, even after ANZ's recent cuts, Westpac still has the lowest fixed rates among the big four banks for one- to five-year terms.
Tindall noted that ANZ's lowest rates for two- and three-year fixed terms, at 5.99 per cent, are still far from the current market leaders offering 5.39 per cent and 4.99 per cent respectively. She also mentioned that the cutting cycle is not likely to be over yet, with fixed rates expected to continue falling in the lead-up to Christmas.
The banks' decision to lower fixed rates may be due to the cost of wholesale funding, but there are other factors at play as well. Tindall pointed out the high possibility of the RBA cutting the cash rate in 2025 as another factor. She also believes that the competition between the major players is putting pressure on the rest of the market, which is ultimately a win for consumers.
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