Foreign lender plumbs fixed rate depths

by Mackenzie McCarty18 Sep 2012

A non-major lender has thrown out a fixed rate lure with reductions across its suite of products.

Citibank has claimed in an announcement today that it is the first lender to offer five-year fixed rates below 5.9%, with a reduction of 35 basis points to 5.89% from Monday.

The bank's one, two and three-year fixed rate home loans have been repriced at 5.55%, leaving its one and two-year products down 44 basis points over the past month.

Head of mortgages at Citibank, Vibha Coburn, said its fixed rates were now cheaper or on par with major bank variable rates.

“This is the first time we have had our five-year fixed rates on par with our competitive variable rates since the yield curve inversed last year," Coburn said.

"Customers with the view that variable rates could reduce even further in the short-term may still be better off locking in a lower fixed rate now; as rates are likely to increase in the medium to long term,” she said.

Coburn added that the products offered certainty for customers in 'turbulent' economic times.

Citibank offers a free 60-day rate lock feature, and is currently offering a refund of application and switching costs for new to bank customers up to $1000.

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