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CBA announces fixed rate cuts

by Malavika Santhebennur10 minute read
CBA announces fixed rate cuts

The major bank has slashed its two-year fixed rates to new lows but increased its four-year fixed rates by 20 bps.

The Commonwealth Bank of Australia (CBA) has shaved 20 bps off its two-year fixed rate home loans for owner-occupiers paying principal and interest in its wealth package.

The big four bank has reduced its two-year fixed rate from 2.14 per cent per annum to 1.94 per cent per annum (3.93 per cent per annum comparison rate), which the major bank said is CBA’s lowest ever advertised home loan rate.

However, at the same time, CBA has increased its four-year fixed rate for owner-occupiers paying principal and interest by 20 bps, from 1.99 per cent per annum to 2.19 per cent per annum (comparison rate 3.73 per cent per annum).

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In addition, CBA has announced a 30 bps reduction on a new three-year fixed rate home loan for investors paying principal and interest in the wealth package to 2.39 per cent per annum (4.31 per cent per annum comparison rate), which the major bank said represents its lowest ever advertised investor rate.

Commenting on the interest rate changes, CBA executive general manager, home buying, Michael Baumann said: “We know that customers are looking to lock in the certainty of fixed rates with around 40 per cent of new customers fixing their loans to take advantage of the current record-low rate environment.

“These changes allow home owners and investors to take advantage of our lowest ever fixed rates, adding to our already market-leading home lending solutions, including the recently announced CommBank Green Loan.”

The new fixed rates were effective from 22 March.

Furthermore, CBA announced that it has launched a new digital splitting tool for customers seeking to split their variable home loan to take advantage of both a fixed and variable home loan.

The lender said that eligible customers can now split their home loan in NetBank and the CommBank app by selecting the portion of their loan and the term they would like to fix, and see in real-time how this split would change their repayments.

Speaking of the launch, Mr Baumann said: “There is a limited understanding from customers that they can split their loan, and this new tool gives customers even more control of their finances and the flexibility of redraw and offset.

“We have made it easier than ever for eligible customers to take advantage of the new fixed rates announced today with the launch of this easy-to-use feature in the CommBank app and NetBank.”

The major bank’s interest rate changes have followed those by Westpac, which reduced mortgage rates across the banking group on its fixed rate owner-occupier and investment loans, and NAB, which in February cut its fixed rates by up to 55 bps.

[Related: CBA liable for overcharged interest]

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Malavika Santhebennur

AUTHOR

Malavika Santhebennur is a content specialist at Momentum Media, focusing on mortgages and finance writing.

Before joining Momentum Media in 2019, Malavika held roles with Money Management and Benchmark Media, where she was writing about financial services.

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