The mortgage market continues to become more competitive, after banks and lenders’ ongoing cuts to fixed rates and fees.
One of the non-majors for example, Citibank, has made cuts of 60 basis points in 2012. Currently, Citibank has reduced its one-year fixed rate from 4.74 to 4.59 per cent.
Their five-year rate was cut at the same time from 5.59 to 5.39 per cent.
And Citibank aren’t alone. In the last month, Bankwest, ING Direct, Nationalcorp, P&N Bank, Homeloans and Investec have all cut their rates.
Aaron Milburn from Citibank told The Adviser that Citibank’s ongoing review of their rates was crucial to stay competitive in the marketplace.
“We’ve found the response has been especially positive from brokers and clients who are combining the one-year fixed rate with our standard variable rate, as it combines very attractive pricing with flexibility,” he said.
“This will mean greater savings for clients along with certainty of fixed rates.”
Some banks have been quoted in the media recently saying the fierce competition for the mortgage loan market has reduced lenders’ profit margins.
Throwing some more petrol on the competition fire, CUA today announced it has reduced its premium range of fixed rate home loans to the same as its basic range of fixed-rate loans.
Premium rates at CUA for one-three years are now at 4.89 per cent, with five-year rates at 5.50 per cent.
To add some further cherries to the enticing cake, CUA have waived the first year pro-rata package fee for Rate Breaker Package home loans, and are allowing borrowers to make extra repayments without incurring a penalty while allowing them to link a 100 per cent offset account to their loan.