Non-major cuts three-year fixed rate to 4.49pc

The 39 basis point cut to its three-year fixed-rate products was announced alongside a 10 basis point cut to TMB's two-year fixed rate, to 4.69 per cent.

Mark Middleton, national manager of third party distribution at TMB, said the move places the lender in a highly competitive position.

“This rate reduction supports our statement when we launched our broker channel last year that we would be coming up with highly competitive solutions for the market,” Mr Middleton said. “This is our commitment to aggregators and brokers already accredited with us – watch this space.

“At Teachers Mutual Bank, our aim is always to provide our members with the best value home loan rates. Given the predictions by some that rates will start to climb later this year, these fixed rate home loans represent an opportunity to lock in an excellent rate now, whether entirely fixed, or part-fixed, part-variable.”

Higher than expected inflation figures for December appear to have marked the end of the current downward rate cycle, with the RBA noting that a “period of stability in the policy rate” is likely.

Following this announcement, AMP chief economist Shane Oliver said he expects rates to begin to rise later this year.

“Our view remains that interest rates will be on hold out to around September/October when they will start moving up in response to a pick-up in growth,” he said.

In addition to the rate cuts, TMB is waiving upfront application fees on all new loans, fixed and variable. The removal of these fees represents a $750 saving for home loan applicants.

The new rates are effective February 13 for all new loans.