ANZ Banking Group (ASX:ANZBY) has reduced its fixed home loan rates by 10 to 35 basis points across all 1- to 5-year terms, securing the top spot in each category compared with its Big Four rivals. The cuts include a strategic 35-basis-point reduction to the bank’s 3-year rate, pushing ANZ ahead of National Australia Bank across all fixed-rate terms for owner-occupier loans.
The bank now offers the lowest rates for the 1- and 2-year terms, with its 1-year fixed rate at 5.29% (6.59% comparison rate) and 2-year fixed rate at 5.19% (6.44% comparison rate). For the 3-, 4-, and 5-year terms, ANZ has also managed to undercut NAB, with rates now sitting at 5.34%, 5.74%, and 5.74%, respectively.
These moves have given ANZ a clean sweep across all fixed-rate terms in the Big Four, marking a strong competitive stance in the market.
A calculated move
According to an analysis by Mozo, ANZ's rate cuts were a strategic move designed to strengthen its position among the Big Four. Rachel Wastell, a personal finance expert at the financial comparison site, pointed out that ANZ had already led in the 1- and 2-year fixed terms, but these additional cuts have ensured it remains ahead across all fixed-rate categories.
“ANZ has gone for precision here, slicing just enough off the top to beat NAB across all 1-5 year terms and secure a clean sweep of leading Big Four fixed rates,” Wastell said.
She also noted that ANZ’s timing aligns with expectations of an RBA rate cut.
"With not long until the next RBA meeting, this is a clear signal they’re actively targeting fixed rate borrowers — but they still sit well above the leading fixed rates in the Mozo database," she added. This suggests ANZ is positioning itself ahead of potential rate cuts while also signalling confidence in the market’s trajectory.
Challenger banks still offering lower rates
Despite ANZ's strong lead within the Big Four, challenger banks and customer-owned banks remain the most competitive players in the fixed-rate home loan market.
Mozo’s database reveals that 18 lenders are offering fixed rates below 5% for 1- to 3-year terms, including institutions such as Homeloans360, Pacific Mortgage Group and Regional Australia Bank.
Should borrowers lock in rates now?
As speculation grows about more rate cuts from the RBA, Wastell cautioned that locking in a fixed rate might not always be the best option in a declining rate environment.
“Fixing your home loan is ultimately a bet against the banks, and in a cutting cycle you are locking in an assumption that rates won’t fall as far as expected,” she explained.
Wastell suggested that borrowers who want stability while hedging their bets may want to consider splitting their loan between fixed and variable rates, which would provide flexibility in an uncertain market.