Powered by MOMENTUM MEDIA
the adviser logo
Lender

Big 4 bank cuts rates by up to 90 bps

by Hannah Dowling6 minute read
CBA ME Bank

A major bank has announced mortgage rate reductions of up to 90 bps for both owner-occupiers and investors. 

The Commonwealth Bank of Australia (CBA) has updated its New Wealth Package fixed rates for owner-occupied and investment home loans, for both new and existing customers switching to a fixed rate home/investment home loan as of Tuesday, 24 September.

To continue reading the rest of this article, create a free account
Already have an account? Sign in

IO loans

The largest rate drop is for owner-occupiers with interest-only home loans on a five-year fixed rate, who will see rates drop by 90 basis points to 3.99 per cent, as will investors with an interest-only home loans on a four-year fixed rate.

Advertisement
Advertisement

Owner-occupiers with IO mortgages on one-year and four-year fixed rates will see rates drop by 65 basis points (to 3.89 and 3.99 per cent, respectively), while those with a three-year fixed rate will see their new rate start from 3.79 per cent (10 basis points lower than previous).

P&I loans

Other sizeable rate drops include investors with a four-year fixed rate on P&I repayments, who will see their interest rates fall by 75 basis points to 3.64 per cent.

Investors with P&I repayments on other fixed rate terms will see rates drop from between 5 and 50 basis points.

Owner-occupiers with a P&I home loan that is on a one-year fixed rate term will see a range change of 60 basis points, dropping the new rate to 3.29 per cent. Those with a four-year fixed rate will also see their rates drop by the same amount, bringing the new rate to 3.49 per cent.

ME changes

ME has announced reductions of up to 49 basis points across its variable home loan products for investors.

The bank cut rates for investors on both principal and interest (P&I) and interest-only (IO) loans with a loan-to-value ratio of less than, or equal to, 80 per cent.

The changes have been applied to the “flexible home loan member package” for investors, as well as the “basic home loan” investor product, with all changes effective as of Tuesday, 24 September 2019.

The largest rate reduction (49 basis points) was applied to the bank’s basic home loan product, for investors making principal and interest repayments.

For investors on the bank’s basic home loan product, the new rates are as follows:

  • P&I repayments, any loan amount – 49 basis point reduction to 3.68 per cent p.a. (3.70 per cent comparison rate)
  • IO repayments, any loan amount – 45 basis point reduction to 3.89 per cent p.a. (3.79 per cent comparison rate)

Investors currently on the flexible home loan package (which requires an annual fee of $395) will see the following changes:

  • P&I repayments on a loan amount above $700,000 – 14 basis point reduction to 3.63 per cent p.a. (4.06 per cent comparison rate)
  • IO repayments on a loan amount between $400,000-$700,000 – 23 basis point reduction to 3.89 per cent p.a. (4.19 per cent comparison rate)

The rate reduction announcement comes a week following ME bank’s 2019 financial year results, which saw its home loan portfolio grow by 7.3 per cent, from $24.5 billion to $26.3 billion (or 2.5 times system growth).

 [Related: Major bank drops serviceability floor rate]

Big 4 bank cuts rates by up to 90 bps
cba me bank ta
TheAdviser logo
cba me bank ta

Hannah Dowling

Hannah Dowling

AUTHOR

Hannah Dowling is a journalist for The Adviser and Mortgage Business.

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

Glen Lees

Connective announces record settlement figures

Mortgage aggregator Connective has revealed that its brokers settled a record $95.5 billion across its residential,...

READ MORE
charles grover outfund ta zgvq5o

New SME lender launches into broker channel

A new fintech lender, Outfund, is ramping up for growth through the broker channel after having completed a capital...

READ MORE
david bailey afg ta l8ozkr

AFG’s bottom line hit by Volt closure

The ASX-listed company, Australian Finance Group Ltd (ASX: AFG) has confirmed it is set to deliver “strong...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more