Two of the nation’s biggest banks have dropped variable rate loans in a surprise move. ANZ has dropped its owner-occupier principal and interest rates on its “no frills” loan, following similar loan rate reductions by Commonwealth Bank.

ANZ has recently reduced its basic variable rate from 34 basis points to 3.65%. This could save customers up to $52 per month on a $300,000 30-year loan.

The rate cut, which applies only to new customers, means that ANZ now has the lowest basic variable rate among the Big Four banks. It has been a surprising move from ANZ to buck the rate-hike trend.

“It shows that the bank is competing hard to get new customers as non-banks threaten their market share,” she says. “This comes at a time when the market was expecting ANZ to hike rates and not cut them and the Royal Commission has turned the playing field on its head.”

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