Fixed interest rates have continued their downward slide in October, with 36 lenders moving rates downward this month, according to new research from Australia's financial comparison site RateCity.

RateCity found that almost 90 percent of mortgage lenders have lowered some of their fixed rates since August 1, with some slashing fixed rate home loans by as much as 140 basis points in that time.

Damian Smith, RateCity's CEO, said the bank battle to attract new business has ramped up for the mortgage season with fixed rates now available under the 6 percent mark.

"RateCity calculations show that since August 1, almost 90 percent of lenders have reduced some of their fixed rate mortgages, making them an increasingly attractive option for borrowers.

"The major four banks – ANZ, Commonwealth Bank, NAB and Westpac – have all slashed their fixed rate mortgages by at least 50 basis points for spring. Of the big four, the biggest cut was made by Commonwealth Bank, which slashed its 5-year fixed rate by 85 basis points to 6.89 percent," he said.

The average 3-year fixed rate – one of the most popular fixed terms available – is 6.61 percent, with rates starting at just 6.25 percent.

Longer-term fixed rates, such as 3- and 5-year terms, have seen the majority of cuts in recent months, said Mr Smith.

"On average, 3-year fixed rates have dropped by 66 basis points since the start of August, while 5-year rates have fallen by 68 basis points on average. The 3-year fixed rate has moved 9 basis points in the first half of October alone.”

"For a $300,000 mortgage, if you took up the average 3-year fixed rate now compared to
August 1, your repayments would be $122 less per month, saving you around $4,400 over three years.

"Take up the lowest available 3-year fixed rate now and the savings would be closer to $7,000 after three years," he said.