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Variable rates keep tumbling as ANZ joins 25 lenders cutting

Variable rates keep tumbling as ANZ joins 25 lenders cutting

Australia’s fourth largest bank, ANZ, has cuts its basic variable rate by up to 0.43 per cent for owner-occupiers paying principal and interest.

With risky home lending on the rise, ANZ is now offering lower rates to customers with big deposits, like its big four bank competitors: CBA and Westpac.

ANZ variable rate changes: owner-occupiers 

LoanOld rateNew rateChange
Basic variable

(Simplicity PLUS LVR ≤ 70%)

2.72%

2.29%

-0.43%

Basic variable

(Simplicity PLUS LVR ≤ 80%)

2.72%

2.49%

-0.23%

Note: Above rates are for owner-occupiers paying principal and interest.

ANZ now has the same lowest basic variable rate for owner-occupiers paying principal and interest as CBA and NAB, following similar cuts by the banks last month.

  • CBA: cut by up to 0.40% on October 15 to 2.29%
  • Westpac: cut by 0.20% on August 24 to 1.99% for 2 yrs then 2.49%
  • NAB: cut by 0.40% on October 27 to 2.29%

These variable rate reductions come at the same time as the banks are hiking fixed rates.

Analysis from RateCity.com.au shows today marks the first time since June 2019 that the average of the big four bank’s lowest variable rates is now less than their average 3-year fixed rate for owner-occupiers paying principal and interest.

21.11.08 average big four bank rates.JPG

Source: RateCity.com.au. Note: Westpac introductory rate has been used.

RateCity.com.au database analysis:

  • 25 lenders have cut at least one variable rate in the last month.
  • 30 lenders have at least one variable rate under 2%.
  • 1.77% is the lowest variable rate.

RateCity.com.au research director, Sally Tindall, said: “ANZ has finally bowed to pressure and cut its basic variable rate.”

“This move from ANZ is a bid to remain competitive in a variable-rate market that keeps on tumbling,” she said.

“With risky lending on the rise, it’s no surprise to see ANZ follow CBA and Westpac and offer lower rates to ideal borrowers with big deposits.

“The average of the big four banks lowest variable rates is now lower than the average of their 3-year fixed rates for the first time in almost two-and-a-half years.

“Over the last year, variable rates have largely been left untouched by the big four banks as they focused on slashing fixed rates. However, with a record number of homeowners now fixed, the banks have set their sights on variable customers.

“The problem with variable rates is what goes down can also go up. While the RBA has insisted the cash rate will not rise next year, the banks can still hike these rock-bottom variable rates at any time,” she said.

Lowest big four bank owner-occupier home loan rates

CBAWestpacNAB ANZ
1 yr fixed2.34%1.99%1.99% 1.99%
2 yr fixed2.34%1.99%2.09%2.09%
3 yr fixed2.69%2.29%2.28%2.39%
4 yr fixed2.89%2.69%2.59%2.69%
5 yr fixed3.09%2.99%2.99%2.89%
Variable2.29%1.99% for 2yrs then 2.49%2.29%2.29%

Source: RateCity.com.au. Note: Some CBA, ANZ and Westpac rates are for a loan to value ratio of up to 70%.

Lowest rates on the RateCity.com.au database

LenderAdvertised rate
1 yr fixedGreater Bank, Bank of Us1.59%
2 yr fixedGreater Bank1.59%
3 yr fixedCommunity First Credit Union1.79%
4 yr fixedFreedom Lend2.27%
5 yr fixedFreedom Lend2.27%
VariableReduce Home Loans1.77%

Source: RateCity.com.auNote: Rates are for owner-occupiers paying principal and interest. Some LVR, loan size and location requirements apply. 

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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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