ANZ slices fixed home loans down to 2% range

author-avatar By on April 02,2020
ANZ slices fixed home loans down to 2% range

Julia Gorges Australian Open 2012, by Max Pixel

Big four bank ANZ on Wednesday further slashed interest rates across a variety of fixed-rate loans.

One of the bank's latest offers is a 2.29% p.a. (3.89% p.a. comparison rate*) 3-year fixed owner occupier home loan for principal & interest (P&I) borrowers as part of its 'Breakfree' package. 

It represents a cut of 59 basis points, with the bank previously offering 2.88% p.a. for that product. 

Various other residential loans to see a 59 basis point cut were:

  • Breakfree Residential Fixed 1 Year 150k+: 2.39% p.a. (4.16% p.a. comparison rate*)
  • Residential (non package) Fixed 3 Years: 2.44% p.a. (3.95% p.a. comparison rate*)

Investment loans also saw some love, with the 59 basis point cuts going to:

  • Breakfree Investment Fixed 3 Years 150k+: 2.49% p.a. (4.37% p.a. comparison rate*)
  • Breakfree Investment Fixed 1 Year 150k+: 2.59% p.a. (4.71% p.a. comparison rate*)
  • Investment (non package) Fixed 1 Year: 2.74% p.a. (4.83% p.a. comparison rate*)

Many other fixed loans of both the residential and investment persuasions were also cut between 19 and 49 basis points.

This week's fresh round of cuts follow the bank's introduction on 20 March of its lowest fixed-rate home loan on-record - a two-year fixed rate of 2.19% p.a. (4.00% p.a. comparison rate*) - for owner occupiers paying principal and interest. 

The special two year rate was announced as part of the bank's immediate response to the Reserve Bank of Australia's emergency cash rate cut

The latest cuts also bring the bank closer to challenger banks, and ahead of main rivals CommBank, Westpac and NAB in many cases, with advertised rates hovering close to the elusive high 1.00% range.

Provider
Ad rate
p.a.
Comp rate*
p.a.
Monthly
repayments
 
2.19% 3.88% $1,517 More details
2.29% 3.09% $1,537 More details

Base criteria of: a $400,000 loan amount, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the product provider’s web site. Introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term. Rates correct as at 18 May 2020. View disclaimer.

As to the question if it's a 'good time' to fix your home loan, the opinion is mixed, with experts predicting fixed loans are being cut to entice borrowers to lock themselves in, so banks can ensure cash flow during the coronavirus crisis.

While many variable rate loans now have higher advertised rates than fixed-rate home loans, when it comes to the comparison rate variable-rate loans do still appear to have the wood over fixed-rates. 

Fixed rate loans tend to have higher comparison rates in part because at the end of the fixed-term the loan's rate reverts to a much higher variable rate. 

The table below displays a selection of variable home loans with some of the lowest interest rates on the market for owner occupiers.

Provider
Ad rate
p.a.
Comp rate*
p.a.
Monthly
repayment
 
2.68% 2.74% $1,618 More details

Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term. Rates correct as at 18 May 2020. View disclaimer.


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2019) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au and loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

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author-avatar
Harrison joined Savings in 2020. He is a journalist with more than four years of experience, with previous stints at News Corp and financial comparison site Canstar. With a keen interest in personal finance, Harrison is passionate about helping consumers make more informed financial decisions.

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