ANZ slashes home loan rates by up to 86 bps

The big four bank has announced cuts of up to 86 bps across its fixed owner-occupied and investment home loan products for new borrowers with both principal and interest (P&I) and interest-only (IO) terms.

The changes are effective for all new loan applications submitted from Friday, 21 February.

For owner-occupiers:

• P&I rates have been cut by up to 45 bps, and now start from 2.83 per cent (two-year fixed rate); and
• IO rates have been cut by up to 26 bps, and now start from 3.63 per cent (two-year fixed rate).

For investors:

• P&I rates have been cut by up to 66 bps, and now start from 3.03 per cent (two-year fixed rate); and
• IO rates have been cut by up to 88 bps, and now start from 3.13 per cent (two-year fixed rate).

ANZ is the latest lender to slash fixed rates, with the likes of the Commonwealth Bank of Australia, its subsidiary Bankwest and big four peer Westpac cutting fixed rates by up to 125 bps.

BOQ subsidiary Virgin Money also announced variable rate reductions of up to 10 bps across its mortgage products.

According to Steve Mickenbecker, finance analyst at rate comparison site Canstar, these latest fixed-rate cuts from ANZ are reflective of the bank’s push to regain lost territory in the mortgage market.

“ANZ is following hot on the heels of the Commonwealth Bank reducing fixed rates,” he said.

“The market is supercharged right now as banks jockey to win back market share. ANZ’s market share has lagged well behind in the post-GFC period, and the lender wants to reverse that trend.”

The analyst made particular reference to steep cuts on investor offerings, stating that ANZ and its competitors are closing the gap that initially emerge in response to regulatory restrictions from the Australian Prudential Regulation Authority (APRA).

“The investment cuts are slashing the higher margin banks applied to investment loans, both principal and interest and interest-only, reversing the trend we saw when APRA clamped down on growth in these categories,” he added.

“Investment lending is now a competitive playground for the big banks.”

Mortgage rate could be set to fall further, with analysts continuing to expect additional cuts to the cash rate in the first half of 2020.

AMP chief economist Shane Oliver is expecting the cash rate to drop to 0.25 per cent in order to help achieve the RBA’s targets of sustainable growth in the economy, full employment and 2-3 per cent annual inflation.

[Related: Non-major cuts variable mortgage rates]

Charbel Kadib is the news editor on the mortgages titles at Momentum Media.

Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.

You can email Charbel on: This email address is being protected from spambots. You need JavaScript enabled to view it.