ANZ, the nation's third largest mortgage lender, is the latest banking major to target interest-only property investors with big cuts to residential loans.

The bank is reducing popular two year interest-only residential investment loan and the less popular two year interest in advance by 26 basis points. It means the headline rates are reduced to 4.33 per cent and 4.13 per cent respectively.

It has also cut 11 basis points off its two year residential investment loan to 4.23 per cent.

ANZ slash investment rates by up to 26 basis points Jessica Shapiro

The cuts follow the Australian Prudential Regulation Authority ending the cap on investor loan growth for any lender that could prove its investor loan book has been growing below the benchmark for at least the past six months and show it has met its requirements on loan serviceability.

Lenders and mortgage brokers claim more rate cuts for investors are expected over coming weeks.