Major undercuts RBA, evens score with NAB

ANZ on Friday announced it would cut its standard variable rate by more than the RBA's 25bp move. The bank dropped rates by 27bps, bringing its standard variable rate to 6.13%. The move puts ANZ on par with rival NAB, which had maintained the lowest SVR among the majors for 46 months.

ANZ Australia CEO Philip Chronican said the decision reflected an easing in the cost of wholesale funds.

"While competition for deposits remains strong, our overall funding cost position has allowed us to reduce variable mortgage rates by 0.27%pa," he said.

Loan Market spokesman Paul Smith predicted the rate cut would "heat up competition between lenders".

"There have been talks of costs-of-funding pressures easing for some time now and this is the clearest sign we've seen of this," Smith said.