​Non-major follows fixed rate cutting frenzy

by AB29 Jan 2014
Following fixed rate cuts from NAB/Homeside and Westpac, non-major lender Citibank has slashed fixed rates by as much as 40 basis points.

Citibank announced yesterday it has cut its four and five-year fixed rate home loans by 40bp. Four-year fixed rate loans now sit at 5.39% and five-year loans at 5.59%.

The non-major also cut its three-year fixed rate by 19bp, bringing it down to 4.99% in an apparent attempt to undercut the majors.

The bank’s two-year fixed rate has been reduced by 20bp to 4.79%, and its one-year rate is now 25bp lower at 4.74%.

Citibank head of mortgage products Arun Balakrishnan said, "Recently, we’ve seen increased market demand in fixed rate home loans. Citibank’s fixed home loans offer customers interest-rate certainty, with very competitive rates across a range of terms."

Recent statistics have shown consumer demand for fixed rates is at its highest level in close to six years, with over a third of new home loans recorded in the month of December being at fixed rates.

Mortgage Choice spokesperson Jessica Darnbrough said the demand is unsurprising.

“Borrowers are increasingly flocking to the safety of fixed rate home loans as they seek to provide themselves with certainty around their mortgage repayments,” said Darnbrough.
“In the current economic environment and with the Reserve Bank keeping its cards close to its chest, it is not surprising to see so many borrowers opting for the safety and security of a fixed rate home loan.”