The "rare phenomena" of inverse yield curves has been touted as the catalyst behind fixed rates tumbling further.
Citibank has announced it will make more cuts to its fixed rates, dropping its three-year rate to 5.94%. The bank's head of mortgages, Vibha Coburn, said inverse yield curves have continued to spur fixed-rate discounting, which has seen Citibank drop its three-year rate 71bps below its lowest new-to-bank variable rates.
"Current uncertainty in Europe has lead to more certainty in Australia for mortgagees. It's a rare occurrence, but one the people refinancing their home should understand," she said.
The bank has now dropped its three-year rates by 138bps since July. Coburn said it is unlikely variable rates will see such drastic cuts.
"Even if the RBA cuts rates next Tuesday and beyond, no one is expecting a cut of the magnitude we've seen in fixed rates," Coburn said.
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