In a bold move preceding next week’s Reserve Bank of Australia (RBA) monetary policy meeting, ANZ has announced cuts to its fixed mortgage rates, lowering them by up to 0.35 percentage points across one- to five-year terms.
The largest reduction is on ANZ’s three-year fixed home loan, which now sits at 5.34%. Its most competitive offer is a two-year fixed rate of 5.19% – the lowest among Australia’s major banks.
The decision comes amid growing market expectations that the RBA will cut the official cash rate, currently at 3.85%, to 3.60% when the board meets July 7-8. Market analysts estimate a 97% probability of a cut, and lenders appear to be positioning themselves accordingly.
“This move by ANZ consolidates its lead as the lowest-cost fixed rate lender out of the majors,” said Canstar data insights director Sally Tindall. “The bank is factoring in the possibility of further cash rate cuts, which could be coming down the line as soon as next week.”
ANZ’s fixed-rate adjustment follows a trend of falling rates among smaller lenders. As of July 2, 13 providers – including Bank of Queensland, Greater Bank, Australian Mutual, and Community First – are advertising at least one fixed mortgage rate below 5%.
While ANZ leads the big four in competitive pricing, Tindall noted the bank still trails smaller institutions offering lower rates. “If you’re looking to lock in your rate, don’t go aiming for one that starts with a five or a six. You should be looking in the fours,” she said.
The rate cut may also signal a strategy to expand ANZ’s fixed loan portfolio, which comprises just 3% of its residential mortgage book. The remaining 97% are variable rate loans, offering greater mobility for borrowers.
In an interview with 9News, Mozo personal finance expert Rachel Wastell highlighted the shift in ANZ’s approach. “This morning, ANZ was holding out for August, but this afternoon, they’ve changed their tune,” she said. “It’s a quick pivot but it does line up with the rate cut energy we’re already seeing across the fixed rate market.”
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