Owners of Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares have found their investment at the forefront of an interest rate battle this month.
The smallest of the 'big four' banks has dropped its variable interest rate to 2.29% for new customers.
The move has led experts to believe competition between lenders is heating up despite the current interest rate environment.
As of Wednesday's close, the ANZ share price is $25.63, 1.02% higher than it finished Tuesday's session.
For context, the S&P/ASX 200 Index (ASX: XJO) also gained 0.37% on Wednesday.
Let's take a closer look at the battle apparently breaking out between Australia's major lenders.
Image source: Getty Images
ANZ fans the flames of competition among lenders
ANZ has dropped its lowest variable rate by 0.15% just weeks after it bumped it higher amid heightening competition between the big banks.
The move is likely an attempt to secure its position in an increasingly competitive lending market.
Right now, some new customers can enjoy a variable rate of 2.29% when they sign onto an ANZ Simplicity PLUS home loan.
Meanwhile, Commonwealth Bank of Australia (ASX: CBA) launched Unloan last week. The digital mortgage platform offers variable rates starting at 2.14%.
Westpac Banking Corp (ASX: WBC) is also bowing to competition. It's offering some new customers a two-year introductory rate of 2.19% on variable home loans.
Experts have noted these offerings are fanning competition between banks battling for home loan customers.
"What these big bank cuts show is that competition in the mortgage market is still alive and kicking, despite the RBA hikes," RateCity.com.au research director Sally Tindall said.
"While most variable customers will now be dealing with higher repayments, some banks eager for new business are handing out exemptions," she said.
ANZ share price snapshot
However, while ANZ is joining in on the interest rate battle, its share price is offering little competition to its big four peers.
The bank's stock has tumbled 7% since the start of this year. That makes it the worst-performing big bank of 2022 so far.
The ANZ share price has also slipped almost 9% over the last 12 months.
