PHOTO: Big Four bank breaks ranks — hikes rates while others prepare for cuts. FILE
In a shock move just days out from a widely expected Reserve Bank of Australia (RBA) interest rate cut, ANZ has hiked its variable mortgage rates — a decision set to rattle the already-fragile confidence of Aussie homebuyers.
From today, ANZ’s lowest variable rate for owner-occupiers will jump to 5.75%, while investor loans hit 6.05% — up by 16 basis points. The surprise hike applies only to new customers using the bank’s digital-only ANZ Plus platform, and comes despite growing expectations of multiple RBA cuts before the end of 2025.
“ANZ’s hike to its lowest variable rate is a reminder some banks are still looking to protect margins,” said Canstar’s Sally Tindall.
“It’s an unusual move just days out from a board meeting that could deliver a cut — but it shows how some banks don’t follow the tide. Let’s just hope it’s not contagious.”https://www.propertynoise.co.nz/unlock-1-2-million-aussie-business-contacts-no-subscriptions-no-limits/
Banks defending profits over borrowers?
In another blow for borrowers, ANZ has scrapped its $2,000 cashback offer, further undercutting appeal for potential switchers. The bank’s official statement confirmed the changes will not impact existing customers — but it signals a tough road ahead for first-home buyers and refinancers alike.
“Our change today is specific to our ANZ Plus variable home loan, and applies only to new customers,” an ANZ spokesperson said.
Canstar data insights manager Sally Tindall said ANZ’s counter hike showed margins were now more important than winning over new customers
Why this matters: Timing is everything
The timing couldn’t be more jarring. Headline inflation has dropped to just 2.1% — the lowest level since March 2021 — and core inflation is now at 2.7%, well within the RBA’s target range. Deputy Governor Andrew Hauser has already hinted that this clears the path for rate cuts.
“We were looking for more evidence that inflation was moving sustainably back to the mid-point,” he said.
“We’ve had another piece of that jigsaw.”
Yet despite growing market certainty of an August 12 rate cut (now priced in at 51% probability), ANZ has opted to break away from the Big Four pack, likely to buffer profit margins rather than compete for new borrowers.
What about the other banks?
While ANZ hikes, NAB has done the opposite, slashing several fixed-rate products. Its two-year fixed rate is down 25bps to 5.19%, and one-year and three-year rates are both cut to 5.29%. NAB now joins ANZ in offering the lowest two-year fixed rate among the Big Four.
Meanwhile, CBA and Westpac still offer variable rates from 5.59%, undercutting ANZ’s latest offering and placing pressure on them to maintain market share.
As Ms Tindall puts it: “Banks are clearly positioning for more RBA moves. ANZ might be out on its own — for now.”
🏡 What It Means for You:
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New buyers: Prepare for a higher barrier to entry with ANZ.
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Existing ANZ borrowers: Your rates remain unchanged — for now.
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Rate watchers: Don’t assume all banks will follow the RBA lead.
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Refinancers: CBA, Westpac, or NAB may now offer better deals than ANZ.
📉 Bottom Line:
Just as Australia inches toward possible relief from high interest rates, ANZ has thrown a curveball. Whether it’s a one-off move or the beginning of a trend remains to be seen — but for now, it’s a sign that bank profits are still king, and Aussie borrowers might not feel the benefits of a rate cut as quickly as they’d hoped.
SOURCE: THE DAILY MAIL