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Commonwealth Bank hikes rates AGAIN

Eliza Bavin
·Personal Finance Editor
·2-min read
A Commonwealth Bank sign on the exterior of a building.
Commonwealth Bank has hiked fixed interest rates yet again. (Source: Getty)

Commonwealth Bank (CBA) has hiked fixed rates by up to 0.20 per cent for owner-occupiers and investors.

Meanwhile, ING, Australia’s seventh-largest bank, also hiked fixed and variable rates today for new customers only.

The hikes follow similar moves from Big Four bank Westpac, which hiked fixed rates on 21 January.

RateCity.com.au research director Sally Tindall said today’s hikes from CBA were unlikely to be the last.

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“These hikes come as the cost of fixed-rate funding continues to rise, putting the bank’s profit margin under increasing strain,” she said.

“While much of the heavy lifting has already been done, we expect fixed rates will keep on rising in the months to come, not just from the Big Four banks but across the market.”

In just 12 months, CBA’s 4-year fixed rate has risen by 1.55 percentage points.

This means someone taking out a $500,000, 4-year fixed loan today will be paying $411 more than someone who took out the same loan one year ago.

“Borrowers still wanting to fix should consider a rate-lock fee to avoid potentially getting lumped with a higher rate,” Tindall said.

“Right now, there are just 28 fixed rates under 2 per cent but the number is dropping rapidly. In a few months’ time they could be extinct.”

What is a rate-lock fee?

A ‘rate-lock fee’ is a fee a customer pays to lock in the fixed rate on offer at the time of application (or any time before settlement), protecting them from any rate rises during the process.

The ‘lock’ typically lasts for around 90 days, but this can differ between lenders.

Rate-lock fees can run into the thousands of dollars, however, it differs between lenders and, in some cases, on the size of the loan, with some banks charging a flat fee and others charging a percentage of the loan.

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