St George cuts fixed rates

St George bank has trimmed the interest rate on a series of fixed rate loans, the latest high-profile rate change by a major bank over the past week.

The Westpac-owned bank cut the cost on a three-year fixed rate home loan by 30 basis points to 5.99 per cent, effective from today. It also lowered its two-year and one-year fixed rate home loans by 20 basis points and 15 basis points, respectively, taking the rate on both of those loans to 5.99 per cent.

“Fixed loans provide customers with the reassurance of repayments locked in for a fixed period,” said St George Bank chief executive George Frazis, in a reference to price volatility in the home loan market.

ANZ Bank hiked the cost on its standard variable rate loan by six basis points to 7.42 per cent on Friday afternoon, blaming rising funding and deposit costs.

Westpac, Commonwealth Bank and National Australia said their mortgage rates were under review, following ANZ’s announcement. NAB has pledged to have the lowest mortgage rates of the big four in 2012.

Australia’s major banks, facing a slowdown in business and consumer lending, have raised efforts to compete for deposits and borrowers.

Citi Australia is also cutting seven basis points from its three-year fixed-rate mortgage, taking it to 6.25 per cent.

czappone@fairfax.com.au