ANZ has cut one of its home loan rates.
ANZ has cut the rate on its two-year fixed home loan special from 5.8% to 5.45%.
The change takes effect on Tuesday.
The bank said, while wholesale rates remain volatile and the official cash rate is expected to continue to rise, “where there is an opportunity, we will pass savings on to customers”.
Interest rates would continue to be reviewed in response to international and local market conditions.
Interest rates have been rising steadily this year.
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In May last year, borrowers taking out a standard one-year rate were paying an average 3.2%. In May this year, that had increased to 5.04%.
Infometrics chief forecaster Gareth Kiernan said there were some signs of weakening in wholesale interest rates.
Banks, like any business, want to charge as much as they can. This is what that means for your interest rates.
The 10-year bond rate had dropped from 4.26% on June 20 to 3.67% on Monday.
“It’s not surprising that we are seeing them say we can pull some of these fixed rates down a bit. But I wouldn’t read too much into it at this stage. If they stayed down we might see it translating into easing of some of the other longer-term fixed rates but if it pops up again next week those specials could disappear.”
Independent economist Tony Alexander said it confirmed his view that fixed rates of between two and five years are now at or “extremely close to” their peaks this cycle.
He agreed bank funding costs had dropped substantially in recent weeks, driven in part by negative global financial news.
But he said all it would take would be some surprisingly positive data out of the US and the rates banks paid would go up again.
The Reserve Bank is forecasting the official cash rate will peak at just under 4% next June, but Alexander said he did not expect it would need to get that high.
Historically low interest rates in recent years are one of the reasons that house prices increased much faster than predicted during the pandemic.