Less than a week before the Reserve Bank is expected to hand down its third cut of the year, ANZ has hit customers with a surprise interest rate hike.
The big four bank has increased its variable home loan rate rate from 5.59 to 5.75 per cent, a rise of 0.16 percentage points.
The hike only applies to new customers though, with existing borrowers unaffected.
“ANZ’s hike to its lowest variable rate is a reminder some banks are still looking to protect margins,” Canstar data insights director Sally Tindall said.
“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.”
ANZ previously had the lowest variable rate from the big four, but has now lost that to Commonwealth Bank and Westpac, which both offer home loans from 5.59 per cent.
Economists and traders are almost uniformly expecting a rate cut to be handed down by the RBA on Tuesday, following the surprise hold last month.
The market is even pricing in a roughly fifty-fifty chance of a supersized 50-basis-point cut which would bring the official cash rate down to 3.35 per cent.
In a sign of how likely most banks see a cut, NAB, in stark contrast to ANZ, announced it was cutting its fixed mortgage rates by a quarter of a per cent.
According to Canstar, close to 20 lenders have cut their fixed-rate offerings ahead of next week’s RBA meeting.
“NAB has come out swinging ahead of the RBA meeting, cutting fixed rates by up to 0.25 percentage points and undercutting its big bank rivals on a range of terms,” Tindall said.
“Its two‑year rate at 5.19 per cent now sets the pace among the big four.
“While fixed rates aren’t the flavour of the month for most borrowers, cuts like these are a sign the banks are bracing for the RBA to move again – most likely on Tuesday.”
The RBA’s monetary policy board will begin its next meeting on Monday, with a decision to be announced the day after.
