- ANZ is the latest major bank to cut fixed rates
ANZ has become the latest of the big four banks to cut its fixed mortgage rates, with generous relief expected for borrowers next year.
The banking giant on Friday cut its three-year fixed rates by 60 basis points to 5.99 percent, while two-year fixed rates were cut by 55 basis points to the same level.
Australia’s big four banks are now offering three-year fixed mortgage rates starting at ‘five’ for borrowers with a 20 per cent deposit, following ANZ’s latest move.
This comes as the futures market predicts four Reserve Bank rate cuts in 2025.
Laine Gordon, money editor at RateCity, said ANZ had bowed to its competitors in a sign that other lenders were also likely to reduce their fixed rates.
“ANZ is the latest big four bank to cut its fixed rate on home loans below 6 per cent, but the bank has succumbed to competition,” he said.
“The number of lenders joining the ‘under six’ club is growing rapidly.”
More than 70 lenders now offer a fixed rate starting with “five”, RateCity data showed.
ANZ has become the last of the big four banks to cut fixed mortgage rates
However, the lowest fixed rates offered by the big four banks are still higher than Abal Banking’s market-leading variable rate of 5.75 percent.
This means customers with a lower variable rate would benefit if the RBA cut rates by 100 basis points, as predicted.
The big four banks still only offer variable rates starting with a “six”, with ANZ now offering the lowest rate of 6.14 per cent.
This is slightly below Commonwealth Bank’s 6.15 per cent level and well below NAB’s 6.79 per cent and Westpac’s 6.44 per cent.
Smaller players continue to offer lower fixed rates than the big four banks.
SWS Bank has the lowest fixed rate of 4.99 per cent, meaning a borrower who now has a variable rate starting with a ‘six’ will not miss out if the RBA cuts rates four times next year.
Macquarie Bank offers two-, four- and five-year fixed rates of 5.39 per cent.
The 30-day interbank futures market now expects the Reserve Bank to begin cutting rates in March from an existing 12-year high of 4.35 percent.
Australia’s big four banks are now offering three-year fixed mortgage rates below 6 per cent following ANZ’s latest move.