ANZ Drops Mortgage Rates – What This Means for You
February 20, 2025 at 6:27 PM
ANZ has just cut its two-year fixed mortgage rate to 4.99%, making it the cheapest offer among the big banks. This follows the Reserve Bank’s decision to lower the Official Cash Rate (OCR) by 50 basis points (bps) to 3.75%.
If you’re a first-home buyer or thinking about refinancing, this is good news! Lower interest rates mean lower repayments, helping you get into the market or ease the pressure on your current mortgage.
Why Are Interest Rates Dropping?
The OCR is basically the rate that influences how much it costs banks to borrow money. When the Reserve Bank lowers it, banks usually cut mortgage rates too. That’s why we’re seeing banks like ANZ, ASB, and BNZ dropping their fixed and floating rates.
ANZ’s move is significant because:
✅ Their two-year fixed rate is now lower than most competitors (who are around 5.29%)
✅ They cut floating rates too, meaning borrowers on flexible home loans also see savings
✅ Other banks might follow suit to stay competitive
What Should You Do?
If you’re a first-home buyer:
- Lower rates mean lower repayments, which could make buying your first home more affordable
- More negotiating power – banks want your business, so shop around for the best deal
- Consider fixing for a short term (1-2 years) if you think rates will drop further
If you already have a mortgage:
- Check when your fixed term ends – if it’s soon, you could lock in a lower rate
- Floating rates are still high (6.89%+), so fixing might save you money
- Shorter fixed terms (1-2 years) could be smart since rates might drop again
Should You Wait for Even Lower Rates?
ANZ’s Grant Knuckey says a lot of borrowers are holding off on fixing long-term because they expect more cuts later this year. If the Reserve Bank keeps lowering the OCR, mortgage rates could drop even further.
But if you need certainty over repayments, locking in a low rate now is still a good option.
Final Thoughts
This is an exciting time for borrowers! Whether you’re buying your first home or refinancing, lower rates give you more options. Keep an eye on what other banks do next, and don’t be afraid to ask for a better deal.
If you’re unsure what’s best for you, chat with a mortgage adviser – getting the right advice could save you thousands!