ANZ cuts rates again as Big Four rev up fixed rate home loans war
ANZ has dropped its fixed rate home loans for the second time in just one month, with rates now as low as 5.74% p.a. as the battle heats up between the Big Four for low-risk borrowers.
ANZ’s fixed interest rates have been cut by 0.25% p.a. for both owner-occupiers and investors with at least a 20% deposit or loan-to-value ratio (LVR) below 80%.
ANZ’s fixed interest rates for LVR <80%
| Fixed rate term | New interest rate | Comparison rate* | Change (% p.a.) |
| 1 year | 6.14% p.a. | 7.13% p.a. | -0.25% |
| 2 years | 5.74% p.a. | 6.94% p.a. | -0.25% |
| 3 years | 5.74% p.a. | 6.81% p.a. | -0.25% |
| 4 years | 5.89% p.a. | 6.75% p.a. | -0.25% |
| 5 years | 5.99% p.a. | 6.69% p.a. | -0.25% |
Source: Mozo.com.au accurate as at 28 October 2024, based on LVR 80% or less. Rates shown include the ANZ fixed rate discount of 0.45% p.a. from the index rate.
The move follows ANZ’s previous rate cut on 11 October, which saw it join CommBank, NAB and Westpac with fixed rates starting with 5 for the first time this year.
For context, the last time ANZ’s two-year fixed was as low as 5.74% p.a. was back in September 2022, while its three-year fixed last hit 5.74% p.a. in April 2023.
ANZ’s latest cuts now mean it offers the best fixed home loan rates† of any of the Big Four banks.
Its new fixed rates also beat the current averages in the Mozo database by up to 0.34% p.a.
For example, the current average for a two-year fixed home loan is 6.08% p.a.†, but ANZ’s new rate has dropped to 5.74% p.a. over the same term.
Similarly, the average three-year fixed is sitting at 6.03% p.a.†, but ANZ is also offering 5.74% p.a. for the same fixed period.
Bad news for low deposit borrowers
ANZ’s rate changes don’t benefit all borrower types – those who have an LVR over 80% are actually worse off.
The bank has removed its 0.15% discount and increased fixed rates for low deposit borrowers with a deposit (or home equity) below 20%.
ANZ’s fixed interest rates for LVR >80%
| Fixed rate term | New interest rate | Comparison rate* | Change (% p.a.) |
| 1 year | 6.59% p.a. | 7.35% p.a. | +0.15% |
| 2 years | 6.19% p.a. | 7.19% p.a. | +0.15% |
| 3 years | 6.19% p.a. | 7.08% p.a. | +0.15% |
| 4 years | 6.34% p.a. | 7.03% p.a. | +0.15% |
| 5 years | 6.44% p.a. | 7.00% p.a. | +0.15% |
Source: Mozo.com.au accurate as at 28 October 2024, based on LVR above 80%.
Mozo’s personal finance expert, Rachel Wastell, says this makes it increasingly difficult for home buyers who are struggling to save for a 20% home loan deposit.
“It’s already extremely difficult for borrowers with less than 80% LVR in the current market due to the high cost of lenders mortgage insurance (LMI) – and ANZ’s removal of the 15bps discount for higher LVR borrowers adds yet another barrier,” she says.
“The fact that ANZ cut its fixed rates just two weeks ago and is now cutting again for lower-risk borrowers while increasing rates for higher LVRs is quite telling. It clearly shows where its priorities lie.”
With interest rates on the move, now could be a good time for borrowers to look at their current interest rate and compare home loans – both fixed and variable.
According to Wastell, even the smallest percentage point difference can equate to thousands in saved interest over the course of your loan.
† Source: Mozo.com.au as at 28 October 2024, average fixed rate for owner-occupier, principal & interest home loans at $400,000, 80% LVR.
* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.
** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.
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