In a bid to ramp up their competitive presence in the mortgage space, lenders have slashed their fixed rate products to all new lows.
According to new data from RateCity, the new average three year fixed mortgage rate is now 7.35 per cent – 3 basis points lower than 1 July 2011 and just 5 basis points above the average standard variable rate.
Some of the most recent lenders to have dropped their fixed rates include Citibank, which yesterday lowered its three year fixed rate 33 basis points to 6.99 per cent.
Last week, ANZ also lowered its three year fixed rate, cutting 5 basis points to take its new rate to 7.19 per cent.
RateCity’s chief executive officer Damian Smith said the gap between the average three year fixed rate and standard variable rate hasn’t been this tight for at least the past two years.
“Some fixed home loan rates have actually been falling for some time. Average three year fixed rates dropped during 2010, and we’ve seen them fall by 8 basis points this year to a new low of 7.35 per cent on average,” he said.