The Commonwealth Bank has announced a raft of changes to interest rates on owner-occupied and investor home loans, with some rates dropping by 55 basis points.
Effective on 11 August, CBA is decreasing rates for both principal and interest (P&I) and interest-only (IO) fixed rate investment and owner-occupier loans, as well as cutting variable rates for its Extra 2 Year Introductory and Life of Loan products. The changes are applicable to both new and existing customers who transition into one of the affected products.
The new rate for one and three-year fixed rate P&I owner-occupied home loans is 4.14 per cent per annum (p.a.), reflecting a cut of 0.40 per cent on the one-year fixed rate and 0.10 per cent on the three-year fixed rate. Five-year fixed rates will also fall by 0.20 per cent to 4.54 per cent p.a.
Interest-only rates will also be cut. Owner-occupier loans will be cut by 0.15 per cent for one-year fixed rates to 4.64 per cent p.a.
Investment loans will also be cut. Fixed rate P&I investment home loans will fall to 4.34 per cent p.a. (-0.40 per cent) for one-year terms, 4.39 per cent p.a. (-0.30 per cent) for three-year terms, 4.64 per cent p.a. (-0.35 per cent) for four-year terms and 4.64 per cent p.a. (-0.55 per cent) for five-year terms.
IO investment fixed rate home loans with one-year terms will fall by 0.15 per cent to 4.84 per cent p.a., loans with three-year terms will fall to 4.64 per cent p.a. (-0.30 per cent) and five-year fixed rates will fall by 0.10 per cent to 5.34 per cent p.a.
Variable rate P&I loans are falling by 0.03 per cent to between 3.89 per cent p.a. and 5.18 per cent p.a.
The changes follow a rough week for CBA, after the bank was found to have breached the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 through failing to adequately monitor and report deposits of $10,000 and more via its intelligent deposit machines.
CBA has also made headlines for its acquisition of Aussie Home Loans this week.
[Related: CBA to reduce commissions ‘imminently’: UBS]
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