ANZ Slashes Fixed Home Loan Rates Ahead of RBA Meeting
In a timely move, ANZ has lowered its fixed home loan interest rates ahead of the Reserve Bank of Australia’s (RBA) meeting scheduled for next week. This adjustment comes as market expectations for a cash rate reduction continue to rise, with fixed rates now trending downwards.
As of today, ANZ decreased its 1 to 5-year fixed rates by up to 0.35 per cent, marking its lowest advertised interest rate at 5.19 per cent for a 2-year loan specifically for owner-occupiers who are paying principal and interest. This places ANZ at the forefront among the Big Four banks — which include Commonwealth Bank, Westpac, and NAB — for the lowest fixed rates available.
According to Sally Tindall, director of data insights at Canstar, ANZ has strengthened its position as the most affordable fixed-rate lender. She noted, “The bank is factoring in the possibility of further cash rate reductions, which could come as early as next week.” It’s also possible that ANZ is aiming to boost its loan portfolio by enticing more customers into fixed-rate contracts, highlighted by its most recent half-year results indicating that a mere 3 per cent of its residential mortgage book is currently on fixed rates.
Interestingly, ANZ stands alone among major banks expecting no further rate cuts from the RBA until August, contrasting with Commonwealth Bank, Westpac, and NAB who anticipate reductions by July. The bank predicts two more rate cuts will occur in the current cycle, one in August and the other in the first quarter of 2026.
Mozo personal finance expert, Rachel Wastell, pointed out that ANZ was the first of the major banks to reduce fixed rates since the RBA’s previous meeting in May, despite its prediction for a rate cut in August. She added, “The latest inflation figures suggest there’s room for the RBA to move again,” reinforcing the growing confidence in upcoming rate cuts, which is likely to make fixed rates increasingly attractive.
Expectations vary among the banks, with the Commonwealth Bank predicting two additional cuts, Westpac forecasting four, and NAB estimating three in the ongoing cycle. A potential 0.25 per cent cut in July could lower monthly repayments by approximately $90 on an average loan of $600,000 over 25 years. Two cuts would decrease payments by nearly $180, while four reductions could lead to savings of up to $350.
Despite ANZ offering the lowest fixed rates among the Big Four, lower rates are available from other lenders. Research from Canstar revealed that 13 different financial institutions, including BOQ, Greater Bank, Australian Mutual, and Community First, are providing rates below 5 per cent. Tindall advised borrowers looking to secure fixed rates, stating, “Aim for a rate that doesn’t start with a 5 or a 6; you should be seeking options in the 4’s.”
Wastell offered some insight for those contemplating fixed-rate loans. “Opting for a fixed home loan essentially involves wagering against the banks. In a cutting cycle, you’re locking in the expectation that rates won’t fall as significantly as anticipated. It may be wiser to consider a split loan as it provides a balance of security while allowing for potential rate decreases.”
She suggested that for borrowers who desire stability while also taking advantage of significantly lower rates than variable options, splitting their loan into fixed and variable portions might be ideal, thus diversifying their risk without committing fully to one rate structure.
This move by ANZ highlights the current landscape of Australian home loan interest rates, where borrowers may need to act promptly to secure competitive deals amidst the fluctuating financial environment.
