the adviser logo

Non-major slashes fixed rates

by Michael Masterman10 minute read

Following recent cuts to fixed rates by two major banks, a non-major has followed suit, slashing its fixed rates by up to 40 basis points.

Citibank announced cuts of 0.4 per cent to its four- and five-year fixed rate products, effective January 28, resulting in rates of 5.39 and 5.59 per cent respectively.

The non-major has also lowered its one-year fixed rate by 25 basis points to 4.74 per cent, a level that is now 5 basis points below Citibank’s current promotional variable rate mortgage.

Arun Balakrishnan, head of mortgage products, said that “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”.


The move by Citibank is the latest in a wave of fixed rate cuts seen very early in the year, including moves by Westpac and the NAB.

AMP chief economist Shane Oliver recently told The Adviser that the downward trend currently observed in fixed rates is a result of increased competitive pressures within the market.

“The more recent moves seem to be more reflective of competitive positions,” he said.

Mr Oliver dismissed suggestions the downward movement in fixed rates was a reflection of lender expectations of further cash rate cuts.

“There seems to be a fair bit of competitive pressure in the market and so that is probably playing a bigger role than a change in the banks' expectations regarding short-term interest rates,” he said.

Citibank has also cut its two-year fixed rate by 20 basis points to 4.79 per cent and its three-year fixed rate by 19 basis points to 4.99 per cent.

Aaron Milburn, head of third party distribution told The Adviser more borrowers are looking to fixed rates for stability.

“Many investors as well as owner occupiers look for stability in their property portfolios. A long-term fixed rate, like our 3-year option, can be quite attractive to these customers,” he said.

“Citibank’s fantastic free 60-day rate lock provides real 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. Existing mortgage holders should also weigh up the benefits provided by different lenders and fixed or variable rates,” added Mr Milburn.

Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more