- ANZ has slashed fixed rate mortgages
Australian home borrowers can now get a much lower fixed mortgage rate with ANZ the latest to slash charges.
ANZ on Friday slashed two-year fixed rates by 35 basis points to 5.39 per cent – the lowest among Australia’s Big Four banks.
The move was made ahead of the Reserve Bank’s May 20 meeting, with financial markets broadly expecting another rate cut next week.
Canstar data insights director Sally Tindall said the banks were trying to lure in new customers before the next rate cut.
‘The bank has one eye on the possibility of cash rate cuts, potentially as soon as 20 May, and another on locking new customers in, using a relatively competitive fixed rate as the hook,’ she said.
While ANZ has the lowest fixed rate among the Big Four banks, Bank of Queensland has an even lower two-year fixed rate of 4.99 per cent.
‘A mortgage rate starting with a “four” is a crucial threshold psychologically that could prompt some borrowers to give up their seat on the variable rate rollercoaster,’ she said.
‘However, by doing so they would be giving up the potential for further cuts in the fixed-rate term.’
Australian home borrowers can now get a much lower fixed mortgage rate with ANZ the latest to slash charges
ANZ on Friday slashed two-year fixed rates by 35 basis points to 5.39 per cent – the lowest among Australia’s Big Four banks
The 30-day interbank futures market is expecting the Reserve Bank to cut interest rates by another 100 basis points by the end of 2025, from 4.1 per cent now to 3.1 per cent for the first time since February 2023.
With February’s 25 basis point rate cut factored in, the 125 basis points of relief predicted for 2025 would be the most in less than a year since 2011 and 2012.
The headline and underlying measures of inflation are both below the RBA’s two to three per cent target for the first time since 2021.
A 25 basis point RBA rate cut on May 20 would take the cash rate down to 3.85 per cent for the first time since June 2023.
ANZ on Friday also reduced its one-year fixed rate by 40 basis points to 5.49 per cent, making it the lowest among the big banks.
But this fixed mortgage rate is barely more than one RBA cut rate cheaper than its lowest online-only variable rate of 5.84 per cent, also offered by the Commonwealth Bank and Westpac.
The Big Four banks are all offering fixed mortgage rates under six per cent.
But the Commonwealth Bank, Australia’s biggest home lender, has fixed rate for one, four and five years starting with a ‘six’.
