ANZ raises fixed rates

“Fixed rates continue to defy gravity, with ANZ the latest bank to hike these rates across the board,” said Sally Tindall, RateCity.com.au research director.

Australia’s fourth largest lender lifted its fixed rates by up to 0.3 percentage points for owner-occupiers and investors.

RateCity.com.au showed ANZ’s fixed rate changes in the table below.

Analysis of the RateCity.com.au database showed that aside from ANZ, more than 40 lenders have hiked at least one fixed rate in the last month.

“While the size and pace of the fixed rate hikes have slowed considerably, there’s little sign of a market-wide turnaround just yet,” Tindall said. “After 2.75 percentage points of cash rate hikes, the gap between fixed and variable has narrowed; however, there’s still a considerable amount of daylight between the majority of these rates.”

Tindall said that the average gap between the big four banks’ lowest two-year fixed rates and their lowest variable rates was 1.19 percentage points – a significant difference considering the banks’ own economic teams predicting further hikes of between 0.25 and 1 percentage points, with three of the four expecting rate cuts in the months after.

“Interestingly, CBA and Westpac’s four-year fixed rates, at 5.49% and 5.64%, respectively are lower than their two- and three-year rates for owner-occupiers,” she said. “These longer-term rates appear to be a bid from Australia’s two biggest banks to lock in customers for the next four years.”

Tindall said that while fixing can provide some customers with certainty to help them budget, anyone looking to lock in their rate would do well to shop around.

“If you’re rolling off a fixed rate and set on doubling down, by all means research the latest projections for the cash rate, but know they could change in a blink of an eye,” she said. “You might be better placed spending more of your time looking for a competitive rate, rather than gazing into the crystal ball. The average of the big four banks’ lowest two-year fixed rates is currently 0.95 percentage points higher than the lowest two-year rate in the market.”