Australian First Mortgage has made its second round of fixed rate cuts in a week.

The lender has announced further cuts to its two and three year fixed rates after reducing them last week by 50-55bps. AFM has now reduced rates on its two-year full doc Flexible Option product by a further 25bps, and on its three-year Flexible Option product by 30bps.

The cuts bring AFM's two and three-year rates to 6.54%. Director Ian Forbes commented that the products stand up well to those offered by major banks.

"When you compare these rates to that of two of the major banks, AFM’s fixed rates are much lower than these major banks. Furthermore our Flexible Option product offers a 100% offset, as well as residential Construction loans, and an LVR to 95% plus LMI, for owner occupied purchasers,” he said.