ISCOVER
The major bank has revealed that pre-approval applications have risen sharply as Australians look to take advantage of lower rates and increased borrowing power.
Conditional pre-approvals for mortgages have jumped at the Commonwealth Bank of Australia (CBA) this year, as borrowers look to capitalise on falling interest rates and greater borrowing power.
The Reserve Bank of Australia (RBA) started its rate easing cycle in February of this year, which was followed by 25 basis point rate cuts in May and August.
Following the second rate cut, CBA saw conditional pre-approval application numbers increase by 12 per cent (when comparing June-July 2025 volumes with those from June-July 2024).
Growth was most pronounced in NSW, with a 25 per cent increase, followed by Queensland at 16 per cent, while pre-approvals held steady in Victoria.
The average home loan conditional pre-approval application amount was also up 13 per cent year on year, to just over $733,000, after the major bank reduced its variable rate in May.
For first home buyers, the average conditional pre-approval amount that customers applied for was $546,000 – an 11 per cent increase, slightly lower than the overall growth rate.
CBA pointed to the rise in conditional pre-approval activity as a sign of more Australians getting prepared to buy property.
Following the third rate cut this year, borrowing capacity has now increased by around 7 per cent, the major bank noted.
“It’s encouraging to see more people feeling confident about their home-buying options,” Marcos Meneguzzi, executive general manager for home buying, said.
“The Aussie dream has long been anchored in home ownership, and this rise in conditional pre-approval activity reflects a renewed sense of optimism as borrowers respond to lower interest rates and increased borrowing power.”
CBA has also recently announced that it has cut interest rates on new fixed-rate mortgages by up to 0.45 per cent p.a.
The lowest rate for a fixed-rate owner-occupied home loan is now 5.49 per cent p.a. (comparison rate 7.43 per cent p.a.) for a three-year loan, while the highest owner-occupied mortgage rate is 6.09 per cent p.a. (comparison rate 7.31 per cent p.a.) for a five-year loan.
For fixed rate investor mortgages, the best rate is a 5.64 per cent p.a. (comparison rate 7.80 per cent p.a.) for a three-year loan, while the highest rate is 6.29 per cent p.a. (comparison rate 7.70 per cent p.a.) for a four-year fixed mortgage.
From Friday (22 August), the major bank also lowered its variable rates for new owner-occupied home loans. However, its lowest advertised variable rate is only available through the bank’s online channel. The new lowest advertised variable rate on the Digi Home Loan is 5.34 per cent p.a. (comparison rate 5.47 per cent p.a.).
The lender said the changes align with its recently announced 0.25 per cent p.a. cut to variable home loan rates, following the Reserve Bank of Australia’s 0.25 per cent cash rate reduction earlier this month.
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