Big four banks continue to cut their mortgage rates in a bid to boost pro ts and squeeze out smaller lenders who have been grabbing market share because of APRA’s lending caps.

ANZ and NAB have followed Commonwealth Bank and Westpac by cutting key rates by up to 50 basis points. The big four banks have room for additional interest- only cuts because they have now undershot APRA’s 30% limit on new lending.

“It’s war,” said Sally Tindell, of RateCity.com.au, which monitors product rates and fees. “The big banks are opening their books again.”
NAB has cut its three-year fixed investor interest-only deals, making it the cheapest of the big four. The five-year fixed owner-occupier principal and interest has been cut from 4.59% to 4.09%. Three-year, interest- only fixed deals for investors have dropped from 4.49% to 4.19%.

All the changes apply only to new fixed rates deals and not for existing borrowers.