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.
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| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare |
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6.04% p.a. | 6.06% p.a. | $2,408 | Principal & Interest | Variable | $0 | $530 | 70% | Featured Online ExclusiveUp To $4K Cashback |
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5.99% p.a. | 5.90% p.a. | $2,396 | Principal & Interest | Variable | $0 | $0 | 80% | Featured Apply In Minutes |
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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.”
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