New Zealand's largest bank has this afternoon announced some of its home loan rates will be cut.
ANZ said it was making the changes to reflect the recent decrease in wholesale swap rates. The changes to home loan and term deposit rates will be effective from tomorrow.
The standard rate for a two-year fixed-term home loan with the bank will be cut by 20 basis points to 7.49% per annum from 7.69%. The standard rate for a three-year fixed-term home loan will be reduced by 14 basis points to 7.35% per annum, from 7.49%
Earlier this month, ANZ economists said "it makes sense to assume that the next move [on mortgage rates] will be down and to factor that into any decision to fix".
They advised that shorter-term fixes may remain more attractive for borrowers.
"We also note that six-month and one-year rates are the same - on average. In a falling interest rate environment, there is merit in fixing for just six months ― as a cheap proxy for floating ― and re-fixing again at expiry.
"Longer-term rates are cheaper and offer more certainty but, given the prospect of them falling, one would have to place a high value on certainty to fix for more than six months now."
An ANZ spokesperson said today: "Interest rates will continue to be reviewed in response to international and local market conditions."
The spokesperson said: "When reviewing interest rates we consider a range of factors, including the impact on customers, the underlying cost of funds ― including wholesale rate movements ― and competitor activity."
"Our most popular term deposit terms ― six months and one year ― have not changed.
"We’ve seen reductions in longer-term wholesale rates recently, which we have considered as part of this change to both term deposits and home loans."
Meanwhile, the rate on a term deposit for a two or five-year term has been lowered by 25 basis points to 5.75% and 5.20% respectively.
A four-year term has decreased by 15 basis points to 5.30%.
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