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ANZ hikes 4- and 5-year fixed home loans but cuts 2-year rates

ANZ hikes 4- and 5-year fixed home loans but cuts 2-year rates

ANZ has today hiked its 4- and 5- year rates by up to 0.45 per cent for owner-occupiers paying principal and interest.

However, the big four bank has also shaved its 2-year fixed rate by 0.10 per cent, taking it down to 1.94 per cent for owner-occupiers. Investor 2-year fixed rates were also cut by 0.15 per cent.

For the first time, ANZ now has an advertised mortgage rate under 2 per cent. By contrast CBA, Westpac and NAB have had rates under 2 per cent since November 2020.

ANZ changes – owner-occupiers paying principal and interest

Lowest rateOld rateNew rateChange
2-year

2.04%

1.94%

-0.10%

4-year

2.24%

2.49%

0.25%

5-year

2.24%

2.69%

0.45%

Note: rates are for owner-occupiers paying principal and interest on a package home loan with a LVR of 80% or less.

Home loan market analysis – which rates are going up and down

Analysis of the RateCity.com.au database shows the majority of 3-, 4- and 5-year rate changes in the last month have been hikes.

However, when it comes to 1- and 2-year fixed rates, there are still more lenders cutting than hiking. The exception is the Westpac group which increased 2-year fixed rates earlier this week.

Fixed rate changes in the last month

Lenders that have cutLenders that have hikedCurrent lowest rate
1-year1051.67%
2-year16121.78%
3-year7131.79%
4-year0172.04%
5-year0182.24%

Source: RateCity, Data accurate as of 11.06.11. Note some lenders have hiked and cut multiple home loans rates, table is from 12 May to 11 June 2021.

RateCity.com.au research director, Sally Tindall, said: “for seven months ANZ was the only big four bank not to offer a home loan rate under 2 per cent. It has finally caved and cut.”

“The trimming of ANZ’s two-year fixed rate is likely to be about winning new business,” she said.

“The latest APRA monthly banking data shows ANZ’s home loan book retracted slightly in April at a time when new home lending was at a record high.

“While the bank shaved two-year rates, it has made sizeable hikes to four- and five-year fixed rates for owner-occupiers in response to the expected rise in the cost of funding over the next few years.

“When the RBA’s term funding facility wraps up at the end of this month banks will have to find cheap money elsewhere. We expect to see more fixed rate hikes following this, particularly for terms of three years and above,” she said.

Big four bank rates – how they compare

“This week’s changes from ANZ and Westpac bring the big four bank pack closer together.

“For months, Westpac had an extremely competitive two-year rate that would have been squeezing its profit margins, while ANZ’s two-year rate was noticeably higher than the other big banks.

“As a result of today’s cut, ANZ is now back in the game when it comes to two-year fixed rates,” she said.

Lowest big four bank owner-occupier home loan rates

CBAWestpacANZNAB
1 year fixed

2.09%

1.99%

2.04%

2.09%

2 year fixed

1.94%

1.89%

1.94%

1.89%

3 year fixed

2.19%

1.98%

2.04%

1.98%

4 year fixed

2.24%

2.19%

2.49%

2.19%

5 year fixed

2.99%

2.49%

2.69%

2.49%

Variable

2.69%

2.19% for 2 yrs then 2.69%

2.72%

2.69%

Data accurate as of 11.06.11. Note: Westpac's rates are for a loan to value ratio of up to 70%.

Lowest rates on database

LenderRate
1 year fixedBCU

1.67%

2 year fixedBCU

1.78%

3 year fixedCredit Union SA

1.79%

4 year fixedHume Bank

2.04%

5 year fixedUBank

2.24%

VariableReduce Home Loans

1.77%

Data accurate as of 11.06.11. Note: Rates are for owner-occupiers paying principal and interest. Some LVR requirements apply.

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This article was reviewed by Senior Finance Writer Liz Seatter before it was published as part of RateCity's Fact Check process.

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