ANZ has made a bold market play to kick of 2022, cutting their basic variable rate by 20 basis points in an environment where most lenders expect prices only to rise.
The new rate will see customers with over 30% deposit, or 70% LVR, charged 2.19% and those with an LVR of 80% charged 2.29%, taking ANZ to joint cheapest in the Big Four along with Westpac.
The move proves that there is still hot competition in the market, with non-banks and non-majors making cuts since the start of the year in an attempt to outflank their rivals.
ANZ’s move today represents the first big player to move, though market conditions suggest that they will not be the last.
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“Fixed rates might be on the rise, but competition in the variable rate market is still alive and kicking,” said Sally Tindall of RateCity.
“For months Westpac has had the lowest variable rate out of the big four. ANZ has now thrown down the gauntlet in a bid to win new customers, matching Westpac’s lowest variable rate of 2.19 per cent.
“Variable rates are following a very different trajectory to fixed rates, at least for now. There are 72 variable rates under 2 per cent, however, for most borrowers there’s a catch.
“The vast majority of these variable rate cuts are reserved for new customers, so anyone looking for a rock bottom rate will have to consider switching lenders, or at least haggle with their current bank.
“The one notable exception is low-cost lender Athena, which cut its variable rates this week, not just for new customers but for existing ones as well. That’s a rare act in the mortgage market, particularly when there’s been no move to the cash rate for over a year.
“We expect variable rates will continue to fall over the next couple of months, however, as we get closer to the next cash rate hike, some lenders could move ahead of the RBA, particularly if the cost of funding continues to soar.”