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Gap widens between Big 4 and low-cost lenders as ANZ hikes rates again
ANZ has today hiked fixed rates for the second time this month, as the gap between the big four banks’ fixed rates and the low-cost lenders continues to widen.
ANZ’s fixed rates for owner-occupiers paying principal and interest went up by 0.20 percentage points. The bank also hiked investor and interest-only fixed rates by up to 0.66 percentage points.
ANZ hikes for owner-occupiers paying principal and interest
| Fixed term | Old rate | New rate | Change |
| 1-yr fixed | 2.49% | 2.69% | 0.20% |
| 2-yr fixed | 2.89% | 3.09% | 0.20% |
| 3-yr fixed | 3.39% | 3.59% | 0.20% |
| 4-yr fixed | 3.79% | 3.99% | 0.20% |
| 5-yr fixed | 3.99% | 4.19% | 0.20% |
Source: RateCity.com.au. Note: rates are for owner-occupiers paying principal and interest on a package rate.
While fixed rates have lifted across the board, the big four banks have hiked more aggressively than many of the low-cost lenders.
Since October, CBA and Westpac have hiked rates six times, while NAB and ANZ have hiked five times.
The gap between the average big four bank 2-year fixed rate and the lowest 2-year rate on the market was just 0.13 percentage points in April 2020. Today, that gap has blown out to 0.94 percentage points.
Average big four bank lowest fixed rates vs lowest on the market
| Category | Average big four rate | Lowest rate | Difference % points |
| 1-yr fixed | 2.65% | 1.84% | 0.81% |
| 2-yr fixed | 2.93% | 1.99% | 0.94% |
| 3-yr fixed | 3.39% | 2.39% | 1.00% |
| 4-yr fixed | 3.69% | 2.89% | 0.80% |
| 5-yr fixed | 3.92% | 2.89% | 1.03% |
Source: RateCity.com.au. Note: rates are for owner-occupiers paying principal and interest on lenders’ lowest advertised rates.
RateCity.com.au research director, Sally Tindall, said: “At the start of the pandemic, the big four banks gave the low-cost lenders a run for their money. Not only were they offering competitive rates, but they were splashing around cashback offers of up to $4,000.”
“Today, the big four banks have walked away from the fixed rate fight. Some of their rates are now a whole percentage point higher than the lowest comparable fixed rates on the market,” she said.
“The end of the RBA’s term funding facility and the rise in wholesale funding markets has put pressure on profit margins, forcing the big banks to reassess their strategies.
“Customers looking to fix their home loan now would do well to compare prices beyond the big four banks if they want to save money.
“There is still some competition left in the fixed rate market, but it’s no longer splashed on billboards from the big banks. People now have to look a lot harder than they previously did to find the best deals.
“Anyone still wanting to fix their loan should start getting their ducks in a row, and quickly. There’s just one 2-year fixed rate under 2 per cent left, along with a handful of 1-year fixed rates under this mark, but these are unlikely to last long,” she said.
Lowest big four bank owner-occupier home loan rates
| Rate type | CBA | Westpac | NAB | ANZ |
| 1-yr fixed | 2.79% | 2.49% | 2.64% | 2.69% |
| 2-yr fixed | 2.99% | 2.74% | 2.89% | 3.09% |
| 3-yr fixed | 3.49% | 3.14% | 3.34% | 3.59% |
| 4-yr fixed | 3.69% | 3.54% | 3.54% | 3.99% |
| 5-yr fixed | 3.99% | 3.79% | 3.69% | 4.19% |
| Variable | 2.29% | 2.19% | 2.29% | 2.19% |
Source: RateCity.com.au. Note: Some loan-to-value ratio requirements apply.
Lowest rates on RateCity.com.au
| Rate type | Lender | Advertised rate |
| 1-yr fixed | Unity Bank | 1.84% |
| 2-yr fixed | Geelong Bank | 1.99% |
| 3-yr fixed | Geelong Bank | 2.39% |
| 4-yr fixed | G&C Mutual Bank | 2.89% |
| 5-yr fixed | G&C Mutual Bank | 2.89% |
| Variable | Reduce Home Loans | 1.77% |
Source: RateCity.com.au. Note rates are for owner-occupiers paying principal and interest. Some LVR requirements apply.
Disclaimer
This article is over two years old, last updated on February 25, 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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