ANZ cuts variable mortgage rates as RBA interest rate hike looms

ANZ Bank has become the latest Australian lender to cut its variable base mortgage rate, which experts say predicts interest rates will hike sooner than expected.

Today, ANZ has joined 25 other lenders in reducing its variable base rate to 0.43% for homeowners paying principal and interest.

Like the other “Big Four”, ANZ now offers discounts to customers with large deposits of 30% or more as a counter-offer against riskier home loans.

ANZ is the latest lender to offer discounts to buyers with large deposits. (Nine)

Canstar financial expert Steve Mickenbecker said today’s cut indicates ANZ expects Reserve Bank of Australia (RBA) to hike interest rates earlier than previously reported time frame from 2024.

“The fall in variable interest rates on home loans by ANZ sends a very clear message that the bank expects the Reserve Bank to cut the cash rate at the end of next year or early in the year. 2023, “Mickenbecker said.

“Big banks still offer short-term fixed rates that are lower than their variable rates, but borrowers can expect them to continue to rise. Fixed rate deals aren’t going to get any sharper than they are now.

“The market trend of setting higher prices for lower deposit loans continues, with owner-occupied borrowers in this group paying 0.20% more at ANZ than their larger deposit counterparts.”

The Australian real estate market is booming as repressed – and cashed in – buyers jump into the fray thanks to historically low interest rates, (Pierre Rae)

Giving discounts to buyers with deposits over 30% is another big blow for first-time homebuyers – who regularly report that saving for a deposit is harder than paying off a mortgage, Mickenbecker says.

“Banks are chasing new business hard when the market is strong, but insuring their portfolios against a possible fall in house prices from their now high highs,” Mickenbecker said.

“The upward trend in interest rates for borrowers with low deposits is another kick in the teeth for first-time borrowers already reeling from high real estate entry prices.”

Reserve Bank of Australia (RBA) Governor Philip Lowe maintained his stance that the central bank will be patient with rising interest rates (Sydney Morning Herald)

Currently, Australia’s interest rates are at an all-time high of 0.1%, following a number of emergency cuts to boost the country’s economy during the COVID-19 pandemic.

The RBA has long argued that an increase in the official exchange rate would only occur when inflation is around 2-3% sustainably and wage growth is stable.

Home values ​​in Australia are currently growing at the fastest annual rate since June 1989, after increasing 17.6% in the first nine months of 2021.

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