CitiBank hikes home loan rates after no movement from the RBA

While it isn’t one of the big four, CitiBank is still a prominent player in the Australian financial game, however, it seems that they’ve changed their tactics.

Yesterday, CitiBank bumped up its home loan rates, yes that’s right bumped up not down. 

The bank has shifted rates for both owner occupiers and investors, up to 25 basis points, across both its variable and fixed rate mortgage products. 

Citi claims that the change has come as an attempt to prioritise existing applications and ultimately improve processing times. 

Mozo’s Banking Expert, Peter Marshall says that the reality behind the rate changes  made by CitiBank is to increase the bank’s bottom line. 

“There could be an element of trying to slow down the number of assessment requests they are getting,” he said.  

“To some extent it’s a logical thing to do to try and slow down the number of pre-approval requests you’re getting, especially if you are getting a lot of broker traffic where you could be doing a lot of work that ends up going nowhere. So there definitely could be an argument to say that what they are doing is just to manage the levels of customer service they want to be able to commit to.”

RELATED ARTICLE: December RBA meeting: Interest rates remain 0.75% 

On Tuesday, the RBA decided to leave the current 0.75% official cash rate unchanged, however, over the course of 2019 they made cuts on three occasions - in June, July and October - and experts predict another cut sometime in the New Year. 

And CitiBank appeared to be following suit, well, sort of. They started off with a bang when in June they slashed their Standard Variable Rate by 0.25%, then in July they dropped again by 0.18% and then finally by 0.15% in October. 

However, Citi’s rates have been propped back up again, so here’s a rundown of all the changes CitiBank made for both owner occupiers and investors making principal and interest repayments this week: 

ProductOwner OccupierChange InvestorChange
Basic Variable3.06%+0.10%3.29%Nil
Standard Variable3.19%+0.23%3.39%+0.10%
Offset Variable3.19%+0.23%3.39%+0.10%
1 Year Fixed2.89%+0.15%3.09%+0.10%
2 Year Fixed2.89%+0.15%3.09%+0.10%
3 Year Fixed2.89%+0.15%3.09%+0.10%
5 Year Fixed2.99%+0.25%3.19%+0.20%

For investors making interest-only repayments CitiBank’s Standard Variable Rate as well as the Offset Variable Rate spiked by 0.20% and the 5 year fixed rate also jumped up by 0.10%. 

Despite the changes, CitiBank’s fixed and variable rates are still competitive when compared to other lenders on Mozo’s database. 

“These rate increases says to me that Citi aren’t that keen on getting new business and that their appetite is, for whatever reason, lower,” Marshall said.

“I don’t think that they’ll be dropping rates again anytime soon.” 

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If you’re on the hunt for a competitive home loan, there are plenty of hot offers around. Check out the table below for a handful of them, and for even more jump over to our home loan comparison tool.

Home Loans 2019 - rates updated daily

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure.
  • placeholder
    Mozo Experts Choice 2021
    Smart Booster Home Loan

    1 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    1.99% p.a.variable for 12 months and then 2.48% p.a. variable
    2.47% p.a.

    A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required. Winner of two Mozo Expert's Choice Award for 2021.

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    Details
  • placeholder
    UHomeLoan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.75% p.a.
    fixed 3 years
    2.22% p.a.

    $0 fees and easy application. Choose between weekly, fortnightly or monthly repayments. 3 year fixed rates are for new Owner Occupier Principal & Interest loans.

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    Details
  • placeholder
    Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    interest rate
    comparison rate
    Initial monthly repayment
    2.09% p.a.
    fixed 3 years
    2.43% p.a.

    Get a flexible loan structure with up to six loan accounts with different rate types. Make free extra repayments. Enjoy free redraw facility. No upfront or ongoing fees. Option to earn Qantas points.

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    Details
  • placeholder
    Mozo Experts Choice 2021
    Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    2.19% p.a. variable
    2.19% p.a.

    Fast and efficient online application. Automatic discounts as loan is paid off. Free extra repayments and redraw facility. Zero fees to consider. Min 40% deposit required. Winner of three Mozo Expert's Choice Award for 2021.

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    Details
  • placeholder
    Fixed Home Loan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    1.89% p.a.
    fixed 2 years
    2.15% p.a.

    Award-winning low rate home loan that could save you thousands. No application or ongoing fees, fee-free redraws, unlimited additional repayments and an optional offset account for $10/month. Minimum 10% deposit. Winner of Mozo’s Experts Choice Award for Online Home Lender of the Year 2021.^

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    Details
  • placeholder
    Mozo Experts Choice 2021
    Well Balanced

    Owner Occupier, Principal & Interest, LVR <80%

    interest rate
    comparison rate
    Initial monthly repayment
    2.17% p.a. variable
    2.20% p.a.

    Well Balanced home loan is a low rate home loan with free online redraw and no valuation fee. Purchase, Refinance or Equity Release purposes allowed. Offset Home Loan winner in the Mozo Expert's Choice Award for 2021.

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    Details

*WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

**Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loans Awards

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