Australia’s fourth-largest lender, ANZ, has cut its lowest variable rate back down to 2.29 per cent.
The change is only for new customers as the bank looks to attract more Aussies.
The rate cut comes after the bank hiked variable rates by 0.25 percentage points on May 13 for new and existing customers following this month’s cash rate hike.
Also read: $257 in interest: The rate hike winners
ANZ Simplicity Plus
ANZ is not the only Big Four bank cutting variable rates for new customers.
Last Tuesday, Westpac hiked rates for new and existing customers by 0.25 per cent on the majority of its variable rate loans.
However, on its lowest variable rate, it reintroduced a honeymoon rate of just 2.09 per cent, which increased by 0.40 percentage points after the first two years.
Commonwealth Bank of Australia (CBA) also launched Unloan last week, a new digital offering with a starting variable rate of 2.14 per cent.
“What these big bank cuts show is that competition in the mortgage market is still alive and kicking, despite the RBA hikes,” RateCity research director Sally Tindall said.
“While most variable customers will now be dealing with higher repayments, some banks eager for new business are handing out exemptions.”
Tindall said the moves from Westpac, CBA and ANZ demonstrated a healthy amount of competition in the market, which could see home-owners better off.
“If you’re on a variable rate that’s on the rise, don’t just accept your fate. Get yourself a rate cut by switching to a lender willing to put a competitive price tag on your business,” she said.
“RateCity.com.au database shows there are still at least four lenders offering variable rates under 2 per cent after the May cash rate hike, including a rate of 1.79 per cent from Homestar Finance.
2.09% for 2 yrs then 2.49%
“Variable rate customers with ANZ and Westpac in particular, should pick up the phone and ask their bank where their loyalty lies.
“If years of paying your bank thousands of dollars in interest isn’t enough to get a better rate, it could be time to move your business elsewhere.”