Greater has the lowest 12month fixed rate

Greater Building Society yesterday cut its one-year rate by 25 basis points to 5.69 per cent, claiming it as the lowest home-loan rate on the market. Citibank cut its three-year mortgage rate to 5.94 per cent yesterday. The bank said it has reduced its three-year rate by a total of 138 basis points since July.

Citibank offers a 60-day rate lock at no charge, which means customers are guaranteed the advertised rate for 60 days after application, with a number of lenders competing around the 5.9 per cent mark for one, two and three-year terms.

The cheapest variable rates loans on the market are 6.38 per cent, offered by FirstMac's, and 6.39 per cent, offered by UBank. Australian Prudential Regulation Authority figures released earlier in the week show that home lending is growing at an annual rate of 6.6 per cent. With most commentators expecting that this growth rate will continue into 2012, lenders will continue to compete on rates to attract share.

Source: Banking Day