Commonwealth Bank ditches much-loved mortgage rate
The Commonwealth Bank has increased its 1- to 5- year fixed rates, meaning Australia’s biggest bank no longer offers interest rates below 2 per cent for home loans.
The bank’s move to increase rates by up to 0.50 per cent comes after Westpac increased rates by up to 0.21 per cent.
The rate hikes range from 0.10 per cent for 5-year fixed-rate owner-occupier loans, to 0.50 per cent for 4-year fixed rates.
On a $500,000 loan, that’s a repayment difference of $131 every month.
CBA fixed-rate changes for owner-occupiers
“The fixed-rate hikes are now coming thick and fast and they’re getting bigger as we go,” RateCity.com.au research director Sally Tindall said.
“Anyone who is in the process of fixing their rate with Australia’s largest bank, and didn’t pay a rate-lock fee, will be kicking themselves this morning.”
A customer applying for a $500,000 3-year fixed rate with the bank could stand to pay an extra $5,503 if they didn’t lock in their rate, according to RateCity analysis.
"This latest round of hikes from CBA is more than just a tweak,” Tindall said.
“The mortgage market is undergoing a transformation and it’s happening faster than expected.”
As the global economic recovery gathers pace, banks have quickly lifted rates to keep up with the cost of funding.
“Australia’s two largest banks have hiked fixed rates just days after the RBA’s shift in monetary policy. We expect big four bank rivals NAB and ANZ will follow suit in a matter of days, along with a flurry of other lenders,” Tindall added.
Customers can still access a sub-2 per cent rate at the three other major banks, with Westpac, NAB and ANZ all offering 1.99 per cent 1-year fixed rates.
Westpac also offers a 2-year 1.99 per cent fixed rate, and a 1.99 per cent variable rate.
Lowest big four bank owner-occupier home loan rates
However, borrowers can still find better rates by looking outside of the major lenders. Greater Bank and Bank of Us offer a 1-year fixed rate of 1.59 per cent, while Greater Bank also offers a 2-year fixed rate of 1.59 per cent.
Lowest rates on the RateCity.com.au database
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