The largest home loan lender cuts most fixed rates to have a market-leading offer for one and two year fixed mortgages

Fixed home loan interest rates are taking another step lower with the latest move by ANZ, the nation's largest mortgage lender.

To be fair the dip is not large. But it is significant because it restarts the stalled cutting momentum. And two of its new rates are now market leading.

At 6.35% ANZ offer's the lowest one year rate for any bank. And at 5.79% it has the lowest two year rate, a position Westpac had on its own until now.

It is almost certain other banks will follow ANZ down, and possibly even drive rates slightly lower for the bragging rights.

At each fixed term, the above dot plot shows who has the lowest offer, and how your current bank compares.

It also helps you assess the rate benefits you give up for going shorter.

Now, the lowest carded rates for each fixed term are:

6 months = Bank of China at 6.80%
1 year = ANZ at 6.35%
18 months = Bank of China at 5.95%
2 years = ANZ and Westpac at 5.79%
3 years = a range of main banks and the Cooperative Bank at 5.79%
4 years = BNZ and Westpac at 5.69%
5 years = ASB, BNZ and Westpac at 5.69%

It is probably worth noting that missing from this list is Kiwibank, the institution the Commerce Commission singled out to be the disrupter.

ANZ has cut all its term deposit rates for terms of six months and longer at the same time.

Almost all banks will have some flexibility in their rate offers. So the carded rates are just the start. Negotiate. How flexible they may be will depend on the strength of your financials. And don't forget, banks have savvy tools at hand to 'know' the likely valuation of your property, so if the loan-to-value ratio (LVR) is near 80% you may not find them very accommodating for a lower rate. With falling house prices, the point where low equity premiums start applying is shifting around as well. See this.

And the carded rates we report here can be different to the rates banks might offer in their banking app. We would like readers to reveal what their banking app shows as the potential offer rates. Please add that market intelligence in the comment section below.

A quick check of the wholesale swap rate chart below gives a clear understanding of where funding costs are heading.

One useful way to make sense of the changed home loan rates is to use our full-function mortgage calculator which is below. Term deposit rates can be assessed using this calculator.

And if you already have a fixed term mortgage that is not up for renewal at this time, our break fee calculator may help you assess your options. Break fees will be minimal in a rising market. But they become important in a falling market, like now. Don't forget, when you sign up for a fixed rate you are signing a contract. You have been given the right to break it in legislation but the bank has the right to reclaim its costs when you do so. This is NOT evidence of banks making it hard to switch (as some borrowers, and sadly some journalists seem to think).

Here is the updated snapshot of the lowest advertised fixed-term mortgage rates on offer from the key retail banks at the moment.

Fixed, below 80% LVR	6 mths	1 yr	18 mth	2 yrs	3 yrs	4 yrs	5 yrs
as at September 12, 2024	%	%	%	%	%	%	%
ANZ	6.85 -0.04	6.35 -0.10	5.99	5.79 -0.20	5.79 -0.10	6.29 -0.45	6.29 -0.45
	6.85	6.45	5.99	5.89	5.79	5.79	5.69
	6.85	6.45	5.99	5.89	5.79	5.69	5.69
	6.89	6.45		5.99	5.89	5.89	5.89
	6.85	6.45	5.99	5.79	5.79	5.69	5.69
Bank of China	6.80	6.45	5.95	5.95	5.85	5.85	5.85
China Construction Bank	6.89	6.45	5.99	5.99	5.89	6.40	6.40
Co-operative Bank	6.89	6.39	6.15 -0.04	5.89 -0.10	5.79 -0.20	5.79 -0.20	5.79 -0.20
Heartland Bank		6.69	6.49	6.35	6.15
ICBC	6.89	6.45	5.99	5.99	5.89	5.89	5.89
	6.89	6.59	5.99	5.89	5.89	5.89	5.89
	6.89	6.45	6.65	5.99	5.89	5.89	5.89