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Major bank cuts rates by up to 60bps

by Charbel Kadib6 minute read
ANZ

A big four bank and a non-major lender have announced variable and fixed mortgage rate reductions across both their owner-occupied and investment home loan offerings.

ANZ and Macquarie Bank have reduced their home loan rates by up to 60bps, with changes across both lenders effective from 10 May.

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For its Breakfree discount package, ANZ has announced the following rate changes for owner-occupiers:

  • three-year owner-occupied principal and interest rates have been cut by 30bps to 3.69 per cent (4.94 per cent comparison rate)
  • five-year owner-occupied principal and interest rates have been cut by 20bps to 3.99 per cent (4.89 per cent comparison rate)
  • two-year owner-occupied interest-only rates have been cut by 20bps to 4.29 per cent (5.13 per cent comparison rate)
  • three-year owner-occupied interest-only rates have been cut by 60bps to 3.99 per cent (5.00 per cent comparison rate)
  • five-year owner-occupied interest-only rates have been cut by 59bps to 4.50 per cent (5.07 per cent comparison rate)

ANZ has also made the following changes for Breakfree investment loans:

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  • two-year investment principal and interest rates have been cut by 6bps to 3.89 per cent (5.54 per cent comparison rate)
  • three-year investment principal and interest rates have been cut by 20bps to 3.99 per cent (5.44 per cent comparison rate)
  • five-year investment principal and interest rates have been cut by 26bps to 4.19 per cent (5.31 per cent comparison rate)
  • three-year investment interest-only rates have been cut by 30bps to 4.19 per cent (5.48 per cent comparison rate)
  • five-year investment interest-only rates have been cut by 4bps to 4.95 per cent (5.60 per cent comparison rate)

Meanwhile, Macquarie Bank has reduced variable and fixed mortgage rates by up to 51bps across its Basic and Offset packages.

The non-major’s variable rate changes are as follows:

  • cuts of between 7-21bps for variable home loans for owner-occupiers paying principal and interest and interest only, excluding loans with an LVR of less than 95 per cent
  • cuts of between 11-51bps for variable home loans for investors paying principal and interest and interest only, excluding loans with an LVR of less than 90 per cent

Macquarie’s fixed rate changes include:

  • cuts of between 10-20bps for one, two and three-year fixed rates for owner-occupiers paying principal and interest
  • a cut of 10bps for one-year fixed home loans for owner-occupiers paying interest only
  • a cut of 10bps for one-year fixed home loans for investors paying principal and interest
  • cuts of between 10-15bps for one, two and three-year fixed home loans for investors paying interest only

ANZ and Macquarie are among several lenders that have reduced rates across their fixed rate home loans over the past few months.  

Reflecting on the changes, comparison website Canstar’s finance analyst, Steve Mickenbecker, said lenders are preempting an expected cut to the official cash rate from the Reserve Bank of Australia (RBA).  

“Rate changes are running rife this week,” he said. “Macquarie and ANZ are joining the group of lenders reducing home loan rates ahead of the Reserve Bank curve.”

Mr Mickenbecker added: “The banks are anticipating an official cut to the cash rate in the coming months and are not waiting on the Reserve Bank to move.

“They are instead using this period to sharpen the pricing pencil to attract new business.”

However, the analyst noted that existing borrowers would need to wait for a cash rate adjustment before they too receive lower mortgage rates.

The RBA was expected to drop the official cash rate for the first time since August 2016 when its monetary policy board meeting was held last week.

However, the central bank opted to hold the cash rate at 1.5 per cent, with some analysts, including AMP Capital chief economist Shane Oliver, attributing the RBA’s decision to the current political environment, with the federal election looming.

Mr Oliver added that AMP has “pencilled in” a rate cut in June to offset the continued weakness in the housing market, flat inflation and slow economic growth.

[Related: Lender drops rates by up to 30bps]

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Charbel Kadib

Charbel Kadib

AUTHOR

Charbel Kadib is the news editor on The Adviser and Mortgage Business.

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