The rate cut – effective 30 May – will see ANZ pass on the full 25 basis point reduction to both new and existing variable rate home loan customers.
The bank's lowest advertised variable rate is expected to drop to 5.59% p.a., down from 5.84% p.a., on its digital only ANZ Plus product for eligible refinancers.
For a borrower with a $600,000 mortgage, this reduction could cut monthly repayments by around $95 – from $3,535 to $3,440 – saving more than $1,100 a year.
"The RBA’s second rate cut will be another welcome reprieve for our home loan customers, who have been facing high cost of living pressures for sometime," ANZ Australia retail executive Maile Carnegie said.
ANZ joins NAB and Commonwealth Bank in passing on the RBA's latest cut, as lenders respond to growing pressure to ease the burden on mortgage holders.
The cut applies to both owner-occupiers and investors on variable rates.
Customers on fixed-rate loans, however, will see no immediate change unless their fixed term ends soon.
As always, ANZ is urging customers in financial difficulty to reach out for assistance.
"We remain committed to supporting our customers through tailored solutions and urge [struggling borrowers] to reach out sooner rather than later to discuss options for any additional support required,” Ms Carnegie
Importantly, the rate cut may not automatically lower repayments for all borrowers.
Customers making principal and interest repayments who want to reduce their monthly expense might need to adjust their repayments to realise the savings.
Otherwise, repayments may remain at current levels – with the difference redirected toward the loan principal, effectively increasing extra repayments.
See how other lenders are responding to the RBA's May rate cut: Your Mortgage rolling coverage
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