Citibank has reduced mortgage rates across its home loan product suite, effective for new business from 26 August.

The non-major lender is the latest in a spate of both majors and non-majors reducing their rates, in response to eased guidance from the banking regulator and all-time low cash rates set by the Reserve Bank.

Citi’s variable owner-occupied P&I home loan rates will now start from 3.21% (3.26% comparison rate), while its fixed owner-occupied P&I rates will now start from 2.99% (4.61% comparison rate). Its investment loans with interest-only terms will now start from 3.74% (3.88% comparison rate).

Earlier, Westpac’s subsidiaries (the Bank of Melbourne, BankSA and St.George Bank) also reduced fixed rates across their owner-occupied and investment home loan offerings. The Bank of Melbourne and St.George slashed rates by between 10 bps and 1.35%, with both banks’ owner-occupied fixed rates now starting from 2.94% and investment fixed rates from 3.64%.

According to Canstar’s finance analyst, Steve Mickenbecker, the cuts have come in response to a decline in wholesale funding costs.