ANZ follows rivals, cutting mortgage and savings rates by up to 25 basis points

ANZ moves interest rates to match rivals. Photo / Alex Burton

ANZ is trimming its mortgage rates to match more attractive rates offered by some of its competitors.

The country’s biggest bank is also cutting some of its term deposit and PIE fund rates to pay for the cuts.

It is lowering its six-month standard and special fixed mortgage rates by 25 basis points, its one-year rates by 22bps, 18-month rates by 20bps and two-year rates by 15bps.

The moves follow ASB on Friday announcing it was cutting several interest rates to better align with, if not out-do, some of its competitors.

At 5.57%, ANZ’s one-year special rate will be lower than most of its rivals, with only Heartland Bank outdoing it with an offering of 5.49%, according to data collated by interest.co.nz.

ANZ’s two-year special rate will also stand out against its competitors, at 5.44%.

Meanwhile its special six-month and 18-month rates will match some of its rivals at 5.99% and 5.39% respectively.

Changes will take effect on Wednesday.

Borrowers have recently been opting to put their mortgages on floating or shorter-term rates, likely in the hope of locking in lower longer-term rates once the Official Cash Rate (OCR) falls further.

A massive 94% of new mortgage debt issued in November was either floating or fixed for a year or less, according to the latest available data.

The Reserve Bank is expected to cut the OCR by another 50bps, to 3.75%, when it next reviews the rate on February 19.

Thereafter, bets are on how close to the 3% mark the OCR goes.

ANZ NZ’s general manager of banking products Hennie Burger said that in additional to looking at the OCR, ANZ considers changes in wholesale interest rates, and the requirement to balance the needs of borrowers and savers when reviewing interest rates.

On the other side of ledger, ANZ announced it is lowering some of its deposit rates to levels that don’t look as good alongside its competitors, particularly some of the smaller banks.

ANZ’s 150-day, 210-day, 240-day, 270-day, and one-year rates will be cut by 20bps.

At 4.55%, ANZ’s one-year rate will match ASB’s, but will be lower than BNZ and Westpac’s offerings.

Its 180-day rate will come down by 25bps, its 18-month rate by 15bps and its two-year rate by 10bps.

With interest rates falling, ANZ’s shorter-term rates are more attractive than its longer-term ones.

The most an ANZ saver can receive is 4.8% for a 180 or 210-day term deposit or PIE investment.

Jenée Tibshraeny is the Herald’s Wellington business editor, based in the Parliamentary Press Gallery. She specialises in government and Reserve Bank policymaking, economics and banking.