ANZ increases 4- and 5-year fixed mortgage loans but cuts 2-year rates

ANZ today raised its 4- and 5-year rates to 0.45% for homeowners paying principal and interest.

However, the Big Four banks also cut their 2-year fixed rate by 0.10%, bringing it down to 1.94% for homeowners. 2-year investor fixed rates were also reduced by 0.15%.

For the first time, ANZ now has an advertised mortgage rate below 2%. In contrast, CBA, Westpac and NAB have rates below 2% since November 2020.

ANZ changes – owner-occupiers pay principal and interest

Lowest rate Old rate New rate Switch
2 years

2.04%

1.94%

-0.10%

4 years

2.24%

2.49%

0.25%

5 years

2.24%

2.69%

0.45%

Note: Rates apply to homeowners who pay principal and interest on a fixed price mortgage with an LVR of 80% or less.

Home loan market analysis – what rates go up and down

Analysis of the RateCity.com.au database shows that the majority of the 3-, 4- and 5-year rate changes over the past month have been hikes.

However, when it comes to 1 and 2 year fixed rates, there are always more lenders cutting than hiking. The exception is the Westpac group, which increased its 2-year fixed rates at the start of the week.

Fixed rate changes over the past month

Lenders who cut Lenders who have increased Current lowest rate
1 year ten 5 1.67%
2 years 16 12 1.78%
3 years 7 13 1.79%
4 years 0 17 2.04%
5 years 0 18 2.24%

Source: RateCity, data correct as of 11.06.11. Note that some lenders have increased and reduced the rates of several home loans, the table is from May 12 to June 11, 2021.

RateCity.com.au Research Director Sally Tindall said, “For seven months, ANZ was the only major bank not to offer a mortgage rate of less than 2%. He finally gave in and cut.

“ANZ’s two-year fixed rate cut is likely to gain new business,” she said.

“The latest monthly banking data from APRA shows that ANZ’s home loan portfolio shrunk slightly in April at a time when new home loans were at an all time high.

“While the bank has lowered two-year rates, it has made significant hikes to four- and five-year fixed rates for homeowners in response to the expected rise in the cost of funding over the next several years.

“When the RBA term finance facility ends at the end of this month, banks will need to find cheap money elsewhere. We expect to see more fixed rate hikes as a result of this, especially for terms of three years and more, ”she said.

The Big Four Bank Rates – How They Compare

“This week’s changes from ANZ and Westpac bring the major group closer to the four banks.

“For months, Westpac had an extremely competitive two-year rate that would have reduced its profit margins, while ANZ’s two-year rate was significantly higher than other major banks.

“As a result of today’s cut, ANZ is now back in the game when it comes to two-year fixed rates,” she said.

The Big Four Banks’ Lowest Rates for Homeowner Home Loans

ABC Westpac ANZ NAB
1 year fixed

2.09%

1.99%

2.04%

2.09%

2 years fixed

1.94%

1.89%

1.94%

1.89%

3 years fixed

2.19%

1.98%

2.04%

1.98%

4 years fixed

2.24%

2.19%

2.49%

2.19%

5 years fixed

2.99%

2.49%

2.69%

2.49%

Variable

2.69%

2.19% for 2 years then 2.69%

2.72%

2.69%

Data correct as of 11.06.11. Note: Westpac rates are a loan to value ratio of up to 70%.

Lowest rates on the database

Data correct as of 11.06.11. Note: Rates are for homeowners paying principal and interest. Certain LVR requirements apply.