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ANZ cuts its basic variable rate in a bid for new customers

Laine Gordon avatar
Laine Gordon
- 4 min read
ANZ cuts its basic variable rate in a bid for new customers

Australia’s fourth largest bank, ANZ, has today cut rates on its basic variable home loan by up to 0.20 per cent.

The rate cuts are for new customers with deposits of over 20 per cent, with the biggest discount going to borrowers with deposits of 30 per cent or more.

Changes to ANZ Simplicity Plus variable loan – owner occupiers

Deposit sizeOld rateNew rateChange
30% deposit (LVR 70%)

2.29%

2.19%

-0.10%

20% deposit (LVR 80%)

2.49%

2.29%

-0.20%

Source: RateCity.com.au Note: Rates are for owner-occupiers paying principal and interest. Rates are based on a discount to the standard variable rate.

The move comes after continued pressure on lenders to cut their lowest variable loans, as competition in the market drives these rates down, despite rising fixed rates.

The RateCity.com.au database shows that in the last three months, 65 lenders have cut at least one variable rate.

Most cuts have been to lenders’ ‘no frills’ variable loans and for new customers only. The exception is Athena, which this week cut its lowest variable rates for new and existing customers.

Lenders that have moved at least one rate in the last three months

Rate typeLenders that have cutLenders that have hiked
Variable

65

5

1-year fixed

22

60

2-year fixed

11

75

3-year fixed

1

81

4-year fixed

2

49

5-year-fixed

3

68 

Source: RateCity.com.au. Date range is 20 Oct 2021 to 19 Jan 2022. Note some lenders have moved more than one rate.

There are now significantly more variable rates under 2 per cent than fixed, with 72 variable rates under 2 per cent and just 42 fixed.

Screen Shot 2022-01-20 at 9.21.40 am

Source: RateCity.com.au.

RateCity.com.au research director, Sally Tindall, said ANZ was trying to chase down its big four bank competitor Westpac.

“Fixed rates might be on the rise, but competition in the variable rate market is still alive and kicking,” she said.

“For months Westpac has had the lowest variable rate out of the big four. ANZ has now thrown down the gauntlet in a bid to win new customers, matching Westpac’s lowest variable rate of 2.19 per cent.

“Variable rates are following a very different trajectory to fixed rates, at least for now. There are 72 variable rates under 2 per cent, however, for most borrowers there’s a catch. The vast majority of these variable rate cuts are reserved for new customers, so anyone looking for a rock bottom rate will have to consider switching lenders, or at least haggle with their current bank.

“The one notable exception is low-cost lender Athena, which cut its variable rates this week, not just for new customers but for existing ones as well. That’s a rare act in the mortgage market, particularly when there’s been no move to the cash rate for over a year.

“We expect variable rates will continue to fall over the next couple of months, however, as we get closer to the next cash rate hike, some lenders could move ahead of the RBA, particularly if the cost of funding continues to soar,” she said.

Lowest big four bank owner-occupier home loan rates

Rate typeCBAWestpacNAB ANZ
Variable

2.29%

2.19%

2.29%

2.19%

1 yr fixed

2.54%

2.34%

2.54%

2.39%

2 yr fixed

2.69%

2.49%

2.69%

2.59%

3 yr fixed

3.14%

2.89%

3.14%

2.99%

4 yr fixed

3.34%

3.19%

3.34%

3.39%

5 yr fixed

3.59%

3.39%

3.59%

3.59%

Source: RateCity.com.au. Note: Some loan-to-value ratio requirements apply.

Lowest variable rates on the RateCity.com.au database

LenderDeposit size requiredAdvertised rate
Reduce Home Loans

20%

1.77%

Homestar Finance

40%

1.79%

Pacific Mortgage Group

40%

1.79%

Well Home Loans

40%

1.82%

Freedom Lend

40%

1.84%

Source: RateCity.com.au. Note: Rates are for owner-occupiers paying principal and interest.

Disclaimer

This article is over two years old, last updated on January 20, 2022. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.

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Product database updated 29 Mar, 2024

This article was reviewed by Research Director Sally Tindall before it was published as part of RateCity's Fact Check process.

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