The tide could be turning on fixed interest rates, with major bank ANZ slashing its 3-year fixed-rate home loan today.
ANZ cut its 3-year fixed rate by up to 0.60 per cent for owner-occupiers and investors, a move that is in lock-step with CBA, who cut its 3-year fixed rate last Friday.
RateCity research director Sally Tindall said some fixed rates were “starting to come back down to Earth” but they likely had further to fall.
“Fixed rates have largely been relegated to Siberia over the past 12 months as borrowers overwhelmingly opt for variable rates. Now we are at or near the cash rate peak, the tide is starting to turn,” Tindall said.
“We are finally starting to see more fixed-rate cuts than hikes, in a sign lenders are keen to re-lock customers into these deals.”
Today’s cut means ANZ now has the lowest 3-year fixed rate out of the Big Four banks at 5.49 per cent. But this is still 0.50 per cent higher than the lowest fixed rate in the market.
Tindall said Westpac and NAB were now the odd ones out and expected one or both of them to cut fixed rates in the coming weeks. But that doesn’t mean borrowers will flock to fixed rates.
“Locking in a rate starting with a ‘5’ is a very different proposition to securing a rate that starts with a ‘1’ or a ‘2’,” Tindall said.
“Many economists are predicting cash rate cuts in the next couple of years, with Westpac forecasting up to six cuts over the next two years. It’s no wonder many borrowers aren’t yet keen to chain their mortgage up to a fixed rate.”
ANZ also hiked the rates on its basic variable home loan today for new customers. The up to 0.10 per cent increase is the second hike for new customers in less than a month.
New borrowers with an 80 per cent loan-to-value ratio (LVR) will now have a new rate of 5.69 per cent.
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Source: nz.finance.yahoo.com