ANZ has cut variable home loan rates by 25 basis points following the Reserve Bank of Australia's drop this week, opting not to take the opportunity to have the sole cheapest rate of the big four banks.
After its regular review of rates on the second Friday of each month, ANZ today lowered its variable rates by 25 points to 5.88 per cent – the equal lowest of the Big Four alongside National Australia Bank. ANZ also dropped variable rates for small business customers by 25 basis points.
But because NAB dropped its rates on Tuesday after the RBA's 25-basis-point cut to the official cash rate to a record low 2.5 per cent, ANZ had the opportunity to displace NAB from its position of more than four years as the cheapest offer.
Westpac, which has long had the most expensive advertised variable rate of the majors, on Tuesday cut its rates by 28 basis points to 5.98 per cent. Commonwealth Bank also cut by 25 basis points to 5.9 per cent.
The interest rate cuts come amid a resurgence in the property market, with CBA acting general manager for retail products and customers Clive van Horen yesterday telling The Australian there had definitely been an uptick in competition to write new loans in recent months.
ANZ's chief executive for Australia, Philip Chronican, said the bank made the decision on rates today based on the bank's "competitive positioning", its cost of funding and the impact of economic conditions on its customers.
ANZ became the equal cheapest in May when dropped rates by 27 basis points, outdoing the RBA's official cut.
"Our move to reduce rates by 0.25 per cent per annum maintains ANZ's position as having the equal lowest standard variable rate among the major banks," Mr Chronican said.
ANZ said the 25-basis-points cut would save customers about $58 per month, or $700 per year, on the average home loan of $280,000.
The decision came as Macquarie analysts today argued against Westpac rushing to bring its variable rate down closer to its major rivals in a bid to stem three years of below-system mortgage growth.
"With deposit costs moderating and the recent small standard variable rate adjustment, there is more than enough scope for Westpac to move towards system in a steady, rational and, most importantly, profitable way than CBA," Macquarie analyst Mike Wiblin told clients.
NAB and ANZ have been gaining market share in mortgages among the majors, while CBA is catching up, Nomura analysts said last week after the release of official data.
