Home loan competition heats up as rates fall
ANZ has lowered several fixed home loan and term deposit rates, becoming the latest major lender to pass on savings after the Reserve Bank’s aggressive 0.5% official cash rate (OCR) cut earlier this month.
The move positions New Zealand’s largest home loan lender competitively across most fixed terms, marking the lowest mortgage rates since mid-2022.
ANZ trims fixed rates across multiple terms
Effective today, Oct. 17, ANZ reduced both standard and special fixed home loan rates, 1News and interest.co.nz reported.
For standard fixed rates, the six-month (5.39%), 18-month (5.09%), and two-year (5.09%) terms were all cut, while three-, four-, and five-year terms dropped to 5.49%. The one-year rate remains unchanged at 5.09%.
Among special fixed rates, ANZ lowered the six-month (4.79%), 18-month (4.49%), two-year (4.49%), and three-year (4.79%) offers. The one-year special rate remains steady at 4.49%.
On the home loan front, ANZ’s reductions now make it one of the most competitive among the major banks. According to interest.co.nz, ANZ’s new rates are as low as or lower than its big-five rivals for several key terms — particularly six months and three years fixed — though it is not the cheapest lender overall.
For example, Bank of China leads at 4.68% for six months and ICBC offers the lowest one-year and 18-month terms at 4.25% and 4.29%, respectively. ANZ’s two-year rate of 4.49% matches Westpac and TSB, while its 4.79% three-year rate is nearly identical to Bank of China’s 4.78%.
Borrowers benefit as competition intensifies
Emily Mendes Ribeiro (pictured), ANZ general manager of homeowners, said the bank’s rate cuts will help customers accelerate loan repayments.
“More than 40% of the bank's home loan customers were ahead on payments by six months or more,” Ribeiro said. “These rate cuts will help even more New Zealanders get there.”
Interest.co.nz notes that many homeowners remain focused on paying down debt faster amid job security concerns, even as rates fall.
The last time mortgage rates were this low was in mid-April 2022, when they were rebounding from historic lows in the 3% range.
Term deposit rates lowered in line with home loans
ANZ also announced term deposit rate cuts across all fixed terms, aligning with the broader shift in funding costs following the OCR reduction.
The bank’s updated pricing reflects both competitive pressure and the Reserve Bank’s recent easing of loan-to-value ratio (LVR) restrictions, which give lenders slightly more room to lend to first-home buyers. However, analysts noted that the impact on overall mortgage growth is likely to be limited, as affordability and job confidence continue to constrain demand.
Borrowers urged to compare deals and negotiate
With rates nearing multi-year lows, mortgage advisers are advising borrowers to compare offers across banks, factoring in incentives and cashback deals.
Industry analysts suggest that while discounts from advertised (carded) rates are now harder to secure, incentives such as cashback or legal fee reimbursements play an increasing role in negotiations.
Borrowers can use tools such as mortgage comparison or break-fee calculators to assess whether refinancing could deliver savings in a falling rate environment.
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