Today ANZ joined 25 other lenders by cutting its basic variable rate by up to 0.43 per cent for owner-occupiers paying principal and interest.
Like the other “big four” banks, ANZ is now offering discounts to customers with big deposits of 30 per cent or more as a counter-offer against riskier home loan lending.
Canstar finance expert Steve Mickenbecker said today’s cut indicates ANZ is forecasting the Reserve Bank of Australia (RBA) will hike up interest rates earlier than the previously-indicated timeframe of 2024.
“ANZ’s cut in variable home loan interest rates sends a very clear message that the bank is expecting the Reserve Bank to cut the Cash Rate late next year or early in 2023,” Mr Mickenbecker said.
“The big banks are still offering short-term fixed rates below their variable rates, but borrowers can expect to see them continue to rise. The fixed rate bargains are not going to get any sharper than they are now.
“The market trend to pricing higher for lower deposit loans is continuing, with owner occupied borrowers in this group paying 0.20 percent more at ANZ than their larger deposit counterparts.”
According to Mickenbecker, offering discounts to buyers with deposits above 30 per cent is another blow to first homebuyers – who routinely report that saving for a deposit is harder than servicing a mortgage.
“The banks are chasing new business hard while the market is strong, but are insuring their portfolio against a possible fall of house prices from their now lofty heights,” Mr Mickenbecker said.
“The trend of higher interest rates for lower deposit borrowers is another kick in the teeth for first home borrowers already reeling from the high property entry prices.”
Currently, Australia’s interest rates are at the record-low level of 0.1 per cent, following a number of emergency cuts to stimulate the nation’s economy during the COVID-19 pandemic.
The RBA has long maintained that an increase to the official cash rate will only come when inflation is sustainably in the two to three per cent range and wages growth is stable.
Australia’s housing values are currently rising at the fastest annual pace since June 1989, having increased by an eye-watering 17.6 per cent over the first nine months of 2021.
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