ANZ falls into line with 20bps cut, but takes the profit

The ANZ Banking Group has followed its big bank rivals and lowered its standard variable home loan rates by 0.2 percentage points.

The bank announced today (Friday) that it would lower its standard variable home loan rates effective December 21, 2012.

The bank makes its rate decision on the second Friday of the month.

ANZ’s new standard variable mortgage rate will be 6.4%pa (6.5%pa comparison rate) with the 0.2-percentage-point reduction to save variable mortgage customers about $10 per week for the average home loan of $250,000.

The Reserve Bank of Australia cut the official cash rate by 0.25 percentage points on December 4.

It has been estimated the big banks pocket more than $6 million profit every day they don't pass on the full 25-point rate cut to home borrowers.

“This month we assessed a wide range of factors in reaching our decision including the impact of the lower cash rate on domestic funding sources, continuing competition for deposits, the international funding environment and our competitive position,” ANZ chief executive Australia Philip Chronican said.

“We believe the decision to lower our variable mortgage rate by 0.20 percentage points is the right one for our customers providing a competitive mortgage rate while also recognising the significant uncertainty associated with the fiscal situation in the United States and the political situation in Europe.”