Lenders are facing off by slashing both variable and fixed loan rates out-of-cycle, according to financial comparison websites RateCity and Mozo.
RateCity says BMC Mortgage was the first to cut some of its variable home loan rates out-of-cycle, dropping by 10 basis points on Monday.
RAMS Home Loans and Newcastle Permanent were the latest to reach below 5% with their one-year and 2-year fixed rates respectively, according to RateCity’s database of more than 100 lenders.
Similarly, Westpac have cut their fixed rates to 4.99% on a 2 year package, their lowest level since April 2009.
Mozo says the move is sparking an ‘all-out war’ amongst the banks, with St.George, ANZ, Commonwealth Bank and RAMS all introducing cuts to their fixed interest rate packages.
The latest rate cuts follow the dismal lending market results in December, released earlier this week by the Australian Bureau of statistics (ABS). There were 43,885 home loans financed across Australia in December 2012 - 10% down on December, 2011.