ANZ beats the RBA and all rival lenders bar one with 27 basis points rate cut

ANZ has cut its standard variable mortgage rate by 27 basis points, the first time the bank has cut rates by more than the RBA's official cash rate reduction since announcing its independent interest rate review in December 2011.

Westpac, NAB and the Commonwealth Bank have all passed on 25 basis points to borrowers.

Only the Greater Building Society has passed on more than ANZ with its 30 basis point rate cut announced yesterday.

ANZ's standard variable rate will reduce from 6.40% to 6.13% from May 17 (6.23% p.a. comparison rate) and will steal some of NAB's thunder.

NAB has claimed the lowest standard variable rate for the past 46 months, but must now share that title with ANZ.

NAB will reduce its variable rates from May 13.

The Commonwealth Bank will reduce its standard variable rate to 6.15% on May 13 with Westpac the outlier with a standared variable rate of 6.26% from May 20.

The 27 basis point decrease will save ANZ customers about $60 per month or $750 per year for the average home loan of $280,000.

Since announcing it would go it alone on interest rates, ANZ has twice lifted the cash rate independently of the RBA

It increased variable rates by 6 basis points in February last year and by 6 basis points in April.

“This month we reviewed a range of factors including the Reserve Bank’s decision to decrease the official cash rate this week, our competitive position and a recent easing in the cost of our wholesale funds," said ANZ CEO Australia Philip Chronican

“While competition for deposits remains strong, our overall funding cost position hasallowed us to reduce variable mortgage rates by 0.27%pa.

“This decision reflects ANZ’s approach to reviewing retail lending rates each month which includes an assessment of our overall funding costs and I’m pleased our mortgage customers will see a benefit this month,” he said.

ANZ also said that variable rates for small business lending would decrease by 25 basis points.