Citi and other challenger banks hike fixed home loan interest rates

Citi and other challenger banks hike fixed home loan interest rates

Citi and a number of lenders in the past week increased fixed home loan rates, this time by up to 40 basis points.

Compared to other weeks, this past week has been relatively subdued when it comes to fixed home loan rate rises.

The big four banks have taken the week off as events in Ukraine unfold further, the US Federal Reserve hikes its own cash rate, and petrol prices surpass $2.00 per litre.

Citi increased a number of fixed home loan rates this morning, including these ones:

  • Mortgage Plus Investment Standard Fixed 2 Years: 15 basis point increase to 3.54% p.a. (3.19% p.a. comparison rate*)
  • Mortgage Plus Investment Standard Fixed 5 Years: 20 basis point increase to 4.49% p.a. (3.78% p.a. comparison rate*)
  • Mortgage Plus Standard Fixed 2 Years: 15 basis point increase to 3.24% p.a. (2.86% p.a. comparison rate*)
  • Mortgage Plus Standard Fixed P&I 5 Years: 20 basis point increase to 4.19% p.a. (3.45% p.a. comparison rate*)

These home loans are for a maximum 80% loan-to-value ratio (LVR), borrowing $350,000 or more.

NAB's acquisition of Citi's retail banking operations is expected to be formally approved by the ACCC later this month.


At a time when variable rates are largely heading downwards (chart below), AMP this week decided to increase rates slightly on some variable home loans.

  • Owner Occupied Professional Package 90%: Up 10 basis points to 2.54% p.a. (2.57% p.a. comparison rate*)
  • Investment Professional Package 90%: Up 10 basis points to 2.77% p.a. (2.80% p.a. comparison rate*)

These home loans are paying principal & interest for borrowings up to $500,000.

One of Australia's largest mutual bank, People's Choice Credit Union, also increased rates on a number of fixed home loans.

Noteworthy increases included:

  • Residential Fixed P&I 2 Years: 15 basis point increase to 3.09% p.a. (4.40% p.a. comparison rate*)
  • Residential Fixed P&I 5 Years: 20 basis point increase to 4.39% p.a. (4.61% p.a. comparison rate*)

These home loans are for borrowers with up to 95% LVR.

Other customer-owned banks to increase home loan rates in the past week include Unity Bank, Beyond Bank, Community First Credit Union, which increased by up to 35 basis points.


This comes after the proposed merger of Newcastle Permanent and Greater Bank got the tick of approval from the respective board members.

The merger would make the joined outfit one of the largest customer owned institutions in Australia, and now it's time for members to vote.

"Combined, Greater Bank and Newcastle Permanent have $19.8 billion in total assets and a customer base of approximately 600,000," said Jeff Eather, Newcastle Permanent's chair.

"That puts us in an incredible position to be a real challenger and remain a significant competitor in the banking sector."

Over the past 10 years the number of mutual banks has reportedly halved, with fewer than 70 existing today.


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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 be 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. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of June 29, 2022. View disclaimer.


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