ANZ in shock rate drop
ONE of the nation’s biggest banks has dropped home loan interest rates in a shock move that could see other banks follow suit.
ANZ yesterday revealed it was dropping variable rates on its “no frills” owner-occupier principal and interest variable rate loan.
As listed companies, NAB, Commonwealth Bank and Westpac could not comment on their plans yesterday.
The huge drop of 34 basis points saw the rate plummet to 3.65 per cent and save customers with a $300,000 30-year loan about $52 per month.
The rate is the lowest of the Big Four banks but only applies to new customers.
Mortgage online bidding service Loan Dolphin’s chief executive officer Ranin Mendis said banks were hungrier than ever to attract new customers through their doors.
“ANZ’s latest discounts are an absolute win for owner-occupier borrowers,” he said.
“However, this is still a move to win new business. Existing borrowers who now belong to the back book, they will not be able to take advantage of the latest discounts.”
Banks have been under intense pressure in recent months after the financial services 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 banks were “worried about their market share” and this was a move to attract new customers.
“It’s interesting to see them cutting when everyone expects them to hike,” she said.
Financial comparison website Mozo’s spokeswoman Kirsty Lamont said it gave customers some hope of getting discounted rates.
“The move by ANZ could open the doors for potentially more banks to buck the trend of rising home loan variable rates,” she said. “This is great news for borrowers struggling to meet their mortgage repayments each month.”
The Reserve Bank of Australia board has kept the cash rate on hold since August 2016.
The board will meet again on Tuesday.
It’s not expected that the cash rate will move until at least next year or even 2020.