At the end of March last year approx. 38% of all residential mortgage were fixed, for the same period this year that number had dropped to 4%. It is obvious fixed rates have been unattractive for some time. ANZ this week raised the rates on its basic variable home loan by up to 0.1 percentage points for new customers.

The move comes less than four weeks after the bank lifted the new customer rates on the loan by 0.21pp. "The exodus away from cutthroat new customer variable rates continues, with ANZ the latest big bank to hike these rates," said Sally Tindall RateCity.com.au research director. "The record volume of refinancers is likely to be putting extra pressure on the banks, in addition to the sharp rise in funding costs, forcing them to retreat from the new customer bidding war."

ANZ has also slashed its three-year fixed rate by up to 0.6pp for owner-occupiers and investors, making its three-year fixed rate the lowest on offer from the big four banks at 5.49%. ANZ's three-year fixed rate offer, which was available for borrowers paying principal and interest with a deposit of 20% or more, was still 0.5pp higher than the lowest three-year fixed rate of 4.99%.

Tindall said "the tide is starting to turn" for some fixed rates as we are at or near the cash rate peak, with lenders starting to make fixed-rate cuts rather than hikes, a sign that they are "keen to re-lock customers into these deals."

With both CBA and ANZ having cut their three-year fixed rates in the space of a week, Tindall expects either or both Westpac and NAB to cut these rates in coming weeks.

"While the big banks might be starting to give their fixed rates a much-needed makeover, it's hard to see borrowers flocking back to them in droves at this point in time," Tindall said. "Locking in a rate starting with a '5' is a very different proposition to securing a rate that starts with a '1' or a '2.'

"Many economists are predicting cash rate cuts in the next couple of years, with Westpac forecasting up to six cuts over the next two years. It's no wonder many borrowers aren't yet keen to chain their mortgage up to a fixed rate."