ANZ, the country’s largest bank, has announced cuts to several home loan rates, sparking predictions that competitors will soon make similar moves, RNZ has reported.
The bank has trimmed its one-year fixed special rate by 16 basis points, bringing it down to 4.79 percent — its lowest level since June 2022. Other major banks currently offer the same term at 4.89 percent. ANZ’s six-month special rate will drop to 5.14 percent, while its two-year rate will fall to 4.89 percent, compared to 4.95 percent at rival lenders.
Grant Knuckey, ANZ’s managing director for personal banking, said the reductions aim to help both new borrowers and those looking to refix in a still challenging economy. “The cuts provide another opportunity for borrowers not already on fixed rates to take advantage of the falling interest rate environment,” he noted.
Alongside the mortgage rate cuts, ANZ is also reducing term deposit rates by 10 to 15 basis points. “Savers are bearing slightly less of the fall in interest rates,” Knuckey added, noting that since March 2024, the one-year home loan special has dropped by 2.6 percent, while the equivalent term deposit rate has fallen by 2.4 percent.
Infometrics chief executive Brad Olsen said ANZ’s move appears to pre-empt next week’s official cash rate (OCR) announcement. With markets pricing in a more than 90 percent chance of a cut to 3 percent, Olsen expects other banks to match ANZ’s market-leading rates to remain competitive.
Olsen also highlighted that mortgage rate setting involves multiple factors beyond the OCR, including future interest rate expectations, market risks, and lending competition. ANZ, he said, now enjoys a “first mover advantage” in the current rate environment.