Bank cuts loan rates

ANZ ’no frills’ deal for new clients

BANKS are continuing to cut their interest rates on variable rate deals but existing customers are likely to miss out.

One of the nation’s biggest banks, ANZ, revealed it was dropping variable rates on owner occupier principal and interest loans by 34 basis points to 3.65 per cent on their no frills variable rate loan.

But the fall would not be passed on to existing customers.

The drop will save customers with a $300,000 30-year loan $52 per month and is the lowest basic variable rate among the big four banks.

Mortgage online bidding service Loan Dolphin’s chief executive Ranin Mendis said while it was a win for customers looking to sign up to a new loan, existing customers would miss out.

“Existing borrowers will not be able to take advantage of the latest discounts,’’ he said.

“If you are an existing home loan borrower with ANZ it’s highly recommended that you invest in a phone call to ANZ and renegotiate your rate right down.”

He said recent rate falls — particularly to fixed rate loans — is a sign banks are “hunting for good credit.”

Banks have been under intense pressure in recent months after the financial ser- vices Royal Commission revealed they were ripping off customers. This included misconduct such as fee gouging and misleading customers.

Financial comparison website RateCity’s spokeswoman Sally Tindall said the surprise rate cut by ANZ indicates the banks are under immense pressure.

“It signals the banks are worried about market share and this is their attempt to attract new customers,’’ she said. “It’s interesting to see them cutting when everyone expects them to hike.”

The Simplicity Plus loan has no offset account attached and is the bank’s most basic mortgage product.

The Reserve Bank of Australia board has kept the cash rate on hold since August 2016.

The board meets again on Tuesday and it’s expected they will keep the cash rate on hold.

It’s not expected the cash rate will move until at least next year or even 2020.