Citi is gutting home loan rates by as much as 160 basis points

author-avatar By on August 23, 2019
Citi is gutting home loan rates by as much as 160 basis points

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Citibank will be slashing mortgage rates across its entire home loan product suite from Monday 26 August, with certain rates to be cut by as much as 160 basis points.

That 160 basis point interest rate cut will apply to Citi’s fixed owner-occupied P&I home loans, with fixed home loans to start from 2.99% p.a. (4.61% p.a. comparison rate).

Citi’s variable owner-occupied P&I home loans will be cut by up to 93 basis points, and will start from a new rate of 3.21% p.a. (3.26% p.a. comparison rate), which is enough to make these rates quite competitive in the market.

For investment home loans, variable investment P&I rates will be cut by up to 100 basis points and will start from rates of 3.54% p.a. (3.66% p.a. comparison rate), and fixed investment P&I interest rates are being reduced by as much as 150 basis points, starting from a new rate of 3.49% p.a. (3.90% p.a. comparison rate).

Interest-only loans are being changed too. Citi’s variable, interest-only investment loans will be cut by up to 100 basis points to a new rate of 3.74% p.a. (3.88% p.a. comparison rate) while fixed interest-only investment loans will be cut by up to 150 basis points as well, starting from 3.69% p.a. (4.89% p.a. comparison rate).

According to a note Citi sent to brokers, the rates above are quoted for loan amounts of $750,000 and over in New South Wales and Victoria and for $500,000 and over in all other States and Territories.

Loans below $750,000 and $500,000 will require an additional 0.20% p.a. loading.

A Citi spokesperson told Savings.com.au “it is a business priority for Citi to continue to grow in the mortgages space.”

“Citi’s changes to its interest rates reflect our commitment to having a competitive offering,” the spokesperson said.

Looking for a low variable rate home loan? The table below displays owner-occupier products which may represent the best of the big four banks, best of the top 10 customer-owned banks and the best of the larger non-banks. 

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
FixedMore details
NO UPFRONT OR ONGOING FEES

Basic Home Loan Fixed (Principal and Interest) (LVR < 70%) 3 Years

NO UPFRONT OR ONGOING FEES

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of October 27, 2021. View disclaimer.

These are some significant rate cuts from Citi and have the potential to affect a broad number of people.

Citi is the 13th biggest home-lender in Australia according to APRA’s monthly banking statistics, with more than $7.2 billion in housing loans across owner-occupier and investment properties.

The news of Citi’s impending rate cuts follow yesterday’s news of Westpac and it’s related subsidiaries (St. George, Bank of Melbourne and BankSA) cutting fixed-rate home loans by as much as 135 basis points.

Yet demand for fixed-rate home loans has continued to fall in recent months, which might be why these large institutions are gutting their fixed home loan rates by so much.

According to the latest data from Mortgage Choice, demand for fixed-rate mortgages fell to 14% in July, with CEO Susan Mitchell saying borrowers are still reluctant to fix due to expectations of further Reserve Bank rate cuts.

“It’s not entirely surprising that borrowers are choosing to keep their options open by opting for variable rate home loans. The reality is, the opportunity to save on repayments if the Reserve Bank cuts the cash rate is too good to pass up.

“In the minutes of the RBA Board’s August meeting released yesterday, members judged it reasonable to expect that an extended period of low-interest rates would be required and suggested that further easing of monetary policy may be on the cards.”


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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author-avatar
William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.

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