In an unexpected move, ANZ has raised its variable home loan interest rate from 5.59% to 5.75%, marking an increase of 0.16 percentage points. This change, however, only affects new customers, leaving existing borrowers unaffected. This decision comes just days before the Reserve Bank of Australia (RBA) is anticipated to announce its third interest rate cut of the year, creating a contrasting situation in the banking sector.
Sally Tindall, the data insights director at Canstar, remarked that ANZ’s increase highlights the bank’s aim to protect its profit margins, even when the general trend may be towards lowering rates. This unusual action, taken right before an RBA meeting where a possible cut is expected, illustrates that not all banks are aligned with the prevailing market direction. Tindall expressed hope that this trend won’t spread to other banks.
Previously, ANZ had the lowest variable rate among Australia’s major banks, but it has now been surpassed by both Commonwealth Bank and Westpac, who still offer loans starting at 5.59%.
As for the RBA, economists and market participants widely anticipate a rate cut in the upcoming meeting, following a previous month where rates were unexpectedly maintained. There are even discussions of a significant 50-basis-point cut that could lower the official cash rate to 3.35%.
In contrast to ANZ’s hike, NAB has proactively lowered its fixed mortgage rates by 0.25%, underscoring its strategic positioning ahead of the RBA’s decision. In fact, approximately 20 lenders have reduced their fixed-rate offerings prior to the crucial meeting, indicating widespread market expectations of a RBA rate cut.
Tindall noted that NAB’s move to reduce rates has set a new benchmark among the big four banks, with its two-year rate now positioned at 5.19%. While fixed rates may not be the preferred choice for many borrowers currently, such reductions reflect the banks’ preparations for a likely shift in the RBA’s policy.
The RBA’s monetary policy board is scheduled to convene on Monday, with their decision regarding the cash rate to be unveiled on Tuesday. This forthcoming meeting is poised to attract significant attention, especially in light of the conflicting moves being made by leading banks like ANZ and NAB.