ANZ cuts new customer variable rates by up to 0.50 per cent

Despite the Reserve Bank of Australia hiking the official cash rate and fixed rate loans rising, ANZ has come out and cut new customer variable rates by up to 0.50 per cent.

Australia’s fourth largest lender has cut its basic variable rate for new owner-occupier borrowers between 0.10 and 0.25 percentage points, depending on their loan-to-value ratio (LVR).

The lower rates apply to new loans and borrowers willing to refinance to ANZ, while investor rates have also been cut by as much as 0.50 percentage points. Research Director Sally Tindall said borrowers were increasingly looking for better deals given the sharp interest rate rises.

“The RBA hikes have been the push many borrowers needed to shop around,” Ms Tindall said.

“ANZ knows this, and it’s cutting rates in a bid to attract a bigger slice of this business.

“At 3.19 per cent for owner-occupiers with a decent deposit, this is now the lowest ongoing rate from the big four banks.

ANZ’s rate cut might be good for refinancers, however, it’s tough news for customers already on a Simplicity Plus home loan, who’ve seen their rate rise by 1.25 per cent since the start of May.

Ms Tindall said many banks had cut their variable rates in a bid to win more business.

“In the last three months nine lenders including, CBA, Macquarie and ING have all cut new customer variable rates to tempt refinancers,” she said.

“Complacent borrowers frequently get the raw end of the deal because banks know the majority of their customers will just cop it – not exactly the warm and fuzzy relationship some proclaim.”

According to Ms Tindall, CBA cut its lowest variable rate for new customers by 0.15 per cent, Macquarie Bank cut variable rates by up to 0.25 per cent, ING cut variable rates by up to 0.15 per cent and ME Bank cut variable rates by up to 0.15 per cent.

While variable rates are falling, most lenders are busy hiking fixed rates with NAB increasing their fixed rates for the second time this month.

Ms Tindall said NAB increased fixed rates by up to 0.60 percentage points for owner-occupiers, after hiking by up to 1.10 percentage points on 1 July.

“Fixed rate hikes are still coming thick and fast as the cost of funding continues to put pressure on the banks’ bottom line,” she said.

“In the last month alone, we have seen 90 lenders hike fixed rates, including NAB, which has now increased its rates twice in July.”

With rates rising, Ms Tindall said borrowers needed to put their bank through a loyalty test. 

“Find out what it’s offering new variable customers for the exact same loan and if it’s lower, ask your bank to match it,” she said.

“If your lender doesn’t budge, it might be time to break up with them. 

“Lenders are streamlining application processes and fast-tracking approval times in a bid to win you over.

“Reset the status quo by taking advantage of the banks, rather than have them take advantage of you.”

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Rowan Crosby

Rowan Crosby is a freelance journalist specialising in finance and real estate.