The Commonwealth Bank has cut its mortgage rate to the lowest point ever offered, with National Australia Bank and Westpac following suit to match their rival.
In an effort to win new customers, CBA has sliced its five-year fixed rate home loan to an interest rate of 4.99 per cent per annum, some 0.7 per cent lower than the previous rate it offered, effective today.
NAB and Westpac have followed with a matching 4.99 per cent per annum five-year fixed rate.
NAB also cut its three and four-year rates to further below the other major banks, sending them to their lowest level in 20 years.
Non-bank lender Mortgage House went one step further and cut its fixed rate to 4.97 per cent.
ANZ said it regularly reviews its fixed rate home loan rates to ensure they are competitive, but it is yet to announce any change.
The cuts came on the same day that higher-than-expected inflation figures appeared to reduce the chances of the Reserve Bank cutting the cash rate in the short term.
CBA executive general manager for retail products Lyn Cobley said the offer was an "opportunity for customers to lock in an extremely competitive rate for five years".
The Reserve Bank of Australia has kept the official cash rate on hold at a record low 2.5 per cent since August last year in an attempt to encourage the housing market to help boost the economy as mining investment falls.