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Major bank lifts rates, rolls out new interest-only products

by James Mitchell3 minute read

Australia’s largest lender has lifted its variable rates for property investors and revealed it will introduce new interest-only products in March.

Commonwealth Bank today announced an increase in its standard variable investor home loan interest rates by 7 basis points, to 5.56 per cent per annum, and an increase in Viridian Line of Credit interest rates by 15 basis points, to 5.78 per cent per annum.

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In addition, CBA said it is introducing “new interest-only products, for customers using this repayment option”. The bank said customers affected by the introduction of the new interest-only products will be notified with their regular statements. The product change will be effective in March 2017.

No changes have been made to interest rates for owner-occupiers. CBA said its owner-occupier standard variable rate remains at 5.22 per cent per annum. Business rates also remain unchanged.

The bank’s group executive for retail banking services, Matt Comyn, said CBA has carefully considered the current environment when making this decision – in particular the higher costs associated with funding mortgages, the increased capital costs associated with providing home loans and the need to remain below the regulatory 10 per cent investor home loan growth cap.

“We believe these changes balance the needs of our borrowers and shareholders, while helping to underpin the long-term sustainability of the Australian home loan market,” he said.

“We continue to offer competitive rates across our products, including the lowest owner-occupier standard variable rate among the major banks, and a range of competitive fixed rate products. We encourage our home loan customers to speak with one of our lending experts so we can provide them with a home loan solution that is best for their needs.”

The new rates are effective from 16 December 2016.

Major bank lifts rates, rolls out new interest-only products
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James Mitchell

James Mitchell

AUTHOR

James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.

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