One of Australia’s banks has slashed the interest on its five year fixed mortgage rate, undercutting its variable mortgage rate for the first time.
Yesterday, Citibank announced it would cut 35 basis points from its five year fixed rate home loan, taking the new rate to just 5.89 per cent.
In addition, the lender has also trimmed the interest on its one, two and three year fixed rates to sit at 5.55 per cent.
Speaking about the rate cut, Citibank’s head of mortgages strategy, marketing and product Belen Lopez Denis said this is the first time the bank’s fixed rates were cheaper than its 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. 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,” Ms Lopez Denis said.
Citibank is also offering a free 60-day rate lock which allows customers to guarantee these low fixed rates for 60 days after application.
“The 60-day rate lock provides even further certainty to customers but I’d encourage anyone who is actively seeking a home loan to move quickly to ensure they secure rates at the current levels,” Ms Lopez Denis said.
“Existing mortgage holders should also revisit the market to weigh up the benefits provided by different lenders and fixed or variable rates.”