Fixed rates creeping up

by Adam Smith24 Feb 2012

A number of lenders have put up fixed rates while attention remains on standard variable rate hikes.

Fourteen banks and eight non-banks have now lifted variable rates according to comparison site RateCity. However, the company's chief executive, Damian Smith, said several lenders have also moved on fixed rates.

"Nine lenders have increased their three-year fixed rate home loans - the most popular choice by borrowers - since February 7. While we counted five lenders that have dropped their three-year fixed rates by an average of 10bps, those that have increased were by as much as 39bps," Smith said.

Citibank made the largest move, raising its three-year fixed rate 39bps over less than two weeks to 6.14%. Homeloans, ING Direct and LJ Hooker Finance all moved by 20bps, while Heritage Bank made the smallest move, raising rates only 4bps.

In spite of the move, fixed rates remain at extremely low levels, Smith said.

"[They are] perhaps the lowest they've been for the last three years. They remain highly competitive against variable rates," he said.

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