CitiBank hikes home loan rates after no movement from the RBA

By Polly Fleeting · · 4 min read
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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.” 

RELATED ARTICLE: 'Liar loans' on the rise: 1 in 3 Australian home buyers guilty of fibbing

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.

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Last updated 24 October 2024 Important disclosures and comparison rate warning*

Home loan comparisons on Mozo

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    • Owner Occupier
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    Initial monthly repayment
    $2,852
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    Competitive fixed rate on up to a 30 year loan term. No application fees to pay. Additional repayments up to $20,000 per year without penalty. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
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    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Fixed Home Loan

    • Owner Occupier
    • Principal and Interest
    Interest rate
    5.54 % p.a.
    Fixed 2 years
    Comparison rate
    5.93 % p.a.
    Initial monthly repayment
    $2,852
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    Competitive fixed rate on up to a 30 year loan term. No application fees to pay. Additional repayments up to $20,000 per year without penalty. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.

  • Fixed Rate Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    5.59 % p.a.
    Fixed 5 years
    Comparison rate
    6.27 % p.a.
    Initial monthly repayment
    $2,867

    Get repayment certainty with HSBC’s low 2 Year Fixed Rate Home Loan. Make up to $10,000 of extra repayments a year. The option to split your home loan between fixed and variable. Plus, score $3,288 cashback when you refinance an existing home loan of $250,000. Must apply by 28 February 2023 and settle by 30 April 2023.

  • 2-Year Discounted - Simple Home Loan Variable

    • Owner-Occupied
    • Principal and Interest
    • LVR<60%
    Interest rate
    5.54 % p.a.
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    Initial monthly repayment
    $2,988
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    Enjoy a low variable rate with no application, ongoing or monthly fees to pay. Access your money via internet banking at any time with free redraws. Make additional repayments at any time. Available for owner occupied, investment and interest only repayments.

  • Variable Home Loan

    • Owner Occupier
    • Principal and Interest
    Interest rate
    5.98 % p.a.
    Variable
    Comparison rate
    6.02 % p.a.
    Initial monthly repayment
    $2,991
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    Competitive variable rate on up to a 30 year loan term. No application fees to pay. Unlimited additional repayments. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.

  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
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    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Discounted Home Value Loan

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    • LVR <60%
    Interest rate
    5.99 % p.a.
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    $2,995

    Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Receive $3,288 cashback when you refinance an existing home loan. Minimum loan amount of $250,000, settle within 120 days from applying.

  • Simple Home Loan Variable

    • Owner-Occupied
    • Principal and Interest
    • LVR<60%
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    5.99 % p.a.
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    5.99 % p.a.
    Initial monthly repayment
    $2,995
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    Enjoy a low variable rate with no application, ongoing or monthly fees to pay. Access your money via internet banking at any time with free redraws. Make additional repayments at any time. Available for owner occupied, investment and interest only repayments.

  • Fixed Rate

    • Owner Occupier
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    • <80% LVR
    Interest rate
    5.99 % p.a.
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    Comparison rate
    6.89 % p.a.
    Initial monthly repayment
    $2,995

    Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.

  • Mortgage Simplifier

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    6.14 % p.a.
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    Get a competitive variable rate with ING’s Mortgage Simplifier. Free extra repayments, no monthly or annual fees. Freedom to make free extra repayments or redraws.

  • Elevate

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    Get competitive rates on loan terms of 5 to 30 years with the Aussie Elevate Home Loan. Structure your loan with up to five splits. Make additional repayments (T&Cs apply). Offset accounts available. Unlimited redraw using your online banking account. Choose from weekly, fortnightly or monthly payments For loan amounts from $10,000 to $5 million.

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* 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. You can change the loan amount and term in the input boxes at the top of this table. 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.

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