Fixed mortgage rates have hit new lows amid increased competition among lenders for the owner-occupier market.
RateCity financial analyst Peter Arnold said fixed rates had fallen to as low as 3.3 per cent for a one-year term.
"That is a very low rate," Mr Arnold said.
"We're seeing fixed rates continue to trend down, not by a huge amount, but there is a lot of competition at the pointy end of the market."
Mr Arnold cautioned the 3.3 per cent offer was a one-year fixed rate.
"If you're switching providers just to get that rate for one year make sure you're comfortable with the overall deal you're getting because one year isn't a huge amount of time in the grand scheme of a mortgage."
Canstar commentator Justine Davies said the lowest one-year rate of 3.33 per cent had a comparison rate of 4.28 per cent when taking into account factors such as fees.
"Certainly in the one-year fixed rate there's heaps of loans under four per cent," Ms Davies said.
"Fixed rates have trended down in line with the cash rate reduction, but not by more than the cash rate reduction."
The experts say there are a number of variable rates sitting under four per cent as well.
Ms Davies said the market was very competitive, particularly for owner occupiers, as lending standards tighten.
"Standards are tightening up on lending to investors, therefore it stands to reason that there's increased competition to get the owner occupiers."
Mr Arnold said the special shorter-term rates were a way for lenders to attract new business but noted a lot of providers still had variable rates around five per cent.
"When rates come down it's easy just to take whatever cut your lender gives you because it's saving money in your pocket or years off your loan.
"But by switching from an average rate to one of the lowest rates you're looking at the equivalent of about three Reserve Bank cuts."
MORTGAGE RATES COME DOWN
* RateCity says average variable rate now 4.78 pct, from 4.84 per cent before RBA's May cut
* Canstar says average five-year fixed rate 4.77 pct, 45 basis point decline since December; cash rate down 50bps
* Canstar says average:
- standard variable rate 4.91 pct
- basic variable 4.66 pct
- package variable 4.44 pct
Source: RateCity, Canstar.
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