Mortgage lenders continue to cut variable rates, despite growing speculation that they will start to push variable rates up in response to higher funding costs and in anticipation of a change in the official cash rate later this year.

Right now lenders’ focus is on the mortgage market’s highly competitive dynamics. While fixed rates have been going up for some months, the trend in variable rates is still down.

Canstar reported that seven lenders cut their variable home loan rates in the week ending February 14. The lenders are Citibank, 86 400, Bendigo Bank, Suncorp Bank, Bank of us, ANZ and Bankwest.

The average variable rate cut was 26 basis points.

In the same week, two lenders increased variable rates by an average of 10 bps, two lenders cut fixed rates and 23 lenders increased fixed rates.

The average variable rate for owner occupiers paying principal and interest in the Canstar database is now 3.02 per cent, with the lowest rate 1.77 per cent.

This compares with an average one-year fixed rate of 2.49 per cent for owner occupiers paying P&I, an average two-year rate of 2.71 per cent, three-years at 3.07 per cent, four years at 3.46 per cent and five years at 3.59 per cent.

The average variable rate for investors paying P&I is 3.36 per cent and the lowest rate is 1.99 per cent.