National Australia Bank has cut a range of fixed home loan interest rates, as competition in the mortgage market continues to heat up.

The lender on Monday morning trimmed the package deal on its two-year fixed loan by 5 basis points to 4.84 per cent, equalling the Commonwealth Bank and Westpac.

It also cut three-year rates by 7 basis points to 5.06 per cent, giving it the lowest of the big four, and five year loans by 10 basis points, to 5.69 per cent.

The cuts are the latest signs of banks competing fiercely for customers in the home loan market, where credit growth has bounced back in response house price growth.

“We have seen increased demand for fixed-rate home loans in the past 12 months, so we know many home owners are looking for certainty, whether they are investors or first home buyers, and NAB is offering that through these market-leading fixed home loan rates,” NAB’s personal banking group executive, Gavin Slater, said.

The latest cut in fixed rates comes after NAB – which is trying to expand its market share – last month cut its four-year mortgage rate to the lowest level in 20 years.

At the same time, however, money markets are tipping that the next move in official interest rates will be an increase, which would normally point to rises in fixed interest rates.

An analyst at Canstar, Mitchell Watson, said fixed mortgages were ‘‘keenly priced,’’ but some smaller banks had also started to increase their rates.

‘‘There’s still a lot of competition within fixed rates, however there’s been movements either way in terms of increases and decreases,’’ Mr Watson said.

The proportion of new home loan customers who opted for a fixed rate in December was 16.8 per cent in December, above its long term average but shy of the 20.6 per cent level reached in March last year.

Separately, a new report published by Deloitte on Monday predicted competition in the $1.3 trillion mortgage market would lift in 2014 and years to come as new types of businesses targeted the lucrative sector.

The report, based on interviews with executives from Australia’s biggest banks, said the major banks were making a ‘‘healthy’’ net interest margin of 200 basis points on new mortgages, despite increased discounting.

Banking partner Graham Mott predicted banks would face extra competition from online lenders and other players eyeing the sector’s profits.

“Competition will continue to ramp up as both new online lenders and non-financial services players seek to enter the mortgage market,’’ Mr Mott said.