NAB, ANZ cut interest rates as mortgage war heats up
The Australian 12:00am March 10, 2018
Richard Gluyas
National Australia Bank and ANZ Bank have joined a home loan war for owner-occupiers and investors now that the major banks have complied with lending caps imposed by the prudential regulator.
NAB announced yesterday a 50-basis-point cut to 4.09 per cent in its five-year fixed-rate product for owner-occupiers paying principal and interest.
Two and three-year fixed rates for interest-only loans were sliced by 30 basis points to 4.49 per cent.
ANZ followed suit, cutting three and five-year fixed rates by 40 basis points on its interest-only packages for investors.
The rate for the three-year product is now 4.89 per cent, while the five-year loan is pegged at 5.39 per cent.
Commonwealth Bank started the discount war last Friday, slashing its two-year, interest-only fixed-rate loan to investors by 50 basis points to 4.34 per cent.
The remaining big four bank, Westpac, adjusted the same product by 14 basis points.
The Australian Prudential Regulation Authority launched a crackdown on investor home lending last year to take the heat out of the housing boom.
The regulator told banks to limit the flow of new interest-only lending to 30 per cent of their total new residential mortgage lending. The banks hit the brakes and are now well below APRA’s speed bumps.
Sally Tindall, money editor at ratecity.com.au, said the fixed-rate war showed that the major banks were not pricing in an interest-rate increase in the near future.