ANZ has slashed its basic home loan rates for new customers, as existing variable borrowers face their eighth hike in eight months.
Australia’s fourth largest lender has cut its Simplicity Plus home loan rate by up to 0.1 percentage points for owner-occupiers and up to 0.2 percentage points for investors – but only for new customers with big deposits.
RateCity.com.au showed the changes in ANZ rates for owner-occupiers paying principal and interest:
|
ANZ Simplicity Plus |
Old rate |
New rate |
Change |
|
Loan-to-value (LVR) 70% or less |
4.69% |
4.59% |
-0.1% |
|
LVR 80% or less |
4.79% |
4.69% |
-0.1% |
|
LVR over 80% |
5.73% |
5.73% |
No change |
It’s not just ANZ that is not discounting new customer variable rates. Analysis from RateCity.com.au showed that 38 lenders have cut at least one variable rate for new customers, including all four big banks, since the RBA hikes began in May.
During this period, the majority of existing variable rate customers have seen their rates increase by 2.75 percentage points.
So, what’s one year of loyalty costing existing customers?
According to RateCity.com.au, someone who has taken one of the big four bank’s lowest variable rates in November 2021 would now be on a rate that is, on average, 0.42 percentage points higher than what is on offer to new customers – that’s nearly two standard RBA hikes more.
The difference could mean an additional $2,097 in interest over the next year for a $500,000, 25-year loan today.
Assuming a borrower took out the bank’s lowest rate loan in November 2021 and has not negotiated since, here’s how their variable rates would compare to new customers:
Notes: Rates are for owner-occupiers paying principal and interest on the big four banks’ lowest variable rates. New customer rate includes Westpac’s introductory rate and CBA’s package loan rate.
“ANZ has cut its lowest variable rate in order to stay in the refinancing game,” said Sally Tindall, RateCity.com.au research director. “While the bank’s lowest variable rate is still above its rivals, CBA and Westpac, with a $4,000 refinancing cashback, it’s likely to tempt some new borrowers in the door…
“Refinancing is at near record highs, at the same time thousands of fixed-rate loans are poised to roll back into the market. It’s no wonder the banks are taking the knife to their sharpest variable rates in a bid to attract these potential new customers.”
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