By Eric Johnston
ANZ has lowered a clutch of its longer-dated fixed mortgage rates, becoming the first of the major banks to signal an easing in long-term funding costs.
ANZ has trimmed six basis points from its three-year fixed rates which are now priced at 7.64 per cent.
The cuts means ANZ is becoming more competitive in pricing its fixed-lending products. The bank was previously ranked as one of the most expensive.
Commonwealth Bank is offering three fixed-mortgage rates at 7.89 per cent, and Westpac is offering 7.79 per cent.
ANZ's four-year fixed loans have been cut 19 basis points to 7.74 per cent, and its five-year fixed-mortgage has been cut by nine basis points to 7.94 per cent.
Despite the cuts to longer-term rates, ANZ has raised its one-year fixed rates by 13 basis points to 6.84 per cent, suggesting near term pressure remains on funding costs.
Fixed rates are priced according to the bank bill swap rate, a measure which reflects interest rate expectations for a certain period.
Banks are constantly adjusting fixed-rate pricing to reflect movements in the swap rate for different periods, in contrast to variable loan pricing which generally tracks the Reserve Bank's cash rate.
Most economists expect the Reserve Bank to raise rates this year, but money markets are betting they will be kept on hold.
with Clancy Yeates