ANZ has announced significant cuts to its fixed home loan and term deposit rates, with reductions of up to 30 basis points. This move positions ANZ as a leader among its competitors, following similar cuts made six days earlier. The bank has lowered its carded fixed mortgage rates to the lowest in the market for terms up to three years.
However, savers will face sizable reductions in their term deposit rates. The popular six-month term deposit rate has been slashed by 15 basis points to 5.75%, while the nine-month rate has been reduced by 25 basis points to the same percentage. One-year and 18-month rates are also down by 20 and 30 basis points, settling at 5.70% and 5.60%, respectively.
These rate adjustments come after the Reserve Bank of New Zealand’s dovish monetary policy review, international declines in wholesale rates, and a softer Consumer Price Index report on Wednesday.
Anz leadership in rate reductions
Despite these factors prompting widespread rate reductions, the risk remains due to persistently high non-tradable inflation, which may influence the RBNZ to maintain its current rates for longer.
If the U.S. Federal Reserve makes rate cuts before the RBNZ, the dynamics of international investment in New Zealand’s higher-yielding opportunities could shift, introducing additional complexity into the market. The current landscape sees low levels of housing market activity and tepid demand for commercial loans, reducing the banks’ need for strong funding inflows. This shifting scenario has led to ANZ leveling the playing field by eliminating the rate advantages that challenger banks previously enjoyed, although some of these smaller banks still offer attractive rates for savers that may demand reconsideration.
For those considering new fixed-term mortgages or evaluating existing options, a comprehensive mortgage calculator can assist in making informed decisions. Similarly, a break fee calculator can help evaluate fees in the context of falling rates, which become crucial considerations compared to rising market conditions. The rate cuts mark a challenging period for savers but a potential relief for borrowers.
The implications of these moves, influenced by a confluence of international and domestic factors, remain to be fully seen as 2024 progresses.
