Fixed rates reduced by up to 0.40%, with variable rates also trimmed by 0.25%
The Commonwealth Bank of Australia (CBA) will reduce its fixed home loan rates by up to 0.40 percentage points from today.
The adjustment will apply across all fixed-term options and follows a 0.25 percentage point cut to the bank’s variable mortgage rates, which comes in response to the Reserve Bank of Australia’s recent cash rate decision.
After the changes come into effect, the bank’s lowest fixed rate for a three-year term will be 5.49% for owner-occupiers making principal and interest repayments.
“We continually review our interest rates and will reduce our fixed rate home loans for new lending by up to 0.40% p.a., effective Friday,” a bank spokesperson said. “We remain focused on delivering value through a range of home loan solutions, supported by expert guidance and digital tools designed to meet the evolving needs of our customers.”
Despite the adjustments, CBA’s fixed rates will remain above those of its main rivals. ANZ currently offers the lowest one- and two-year fixed rates among the big four banks, while NAB maintains the most competitive rates for three-, four- and five-year terms.
Canstar’s data shows that 20 lenders have reduced at least one fixed rate this month. Since the RBA’s decision on May 20, five lenders – excluding CBA – have lowered their fixed rates. Four banks, including BOQ, Community First Bank, Police Bank, and Queensland Country Bank, now offer at least one fixed rate below 5%. Bank Australia also provides a green loan at 4.94%.
“Fixed rates have been falling fairly consistently this year, and we expect this activity will continue as banks price in the increasing likelihood of further cash rate cuts,” said Sally Tindall, research director at Canstar. “CBA’s fixed rate cuts aren’t groundbreaking, but rather a bid to inch closer to its key competitors.
“From tomorrow, the bank’s lowest variable rate will be sitting at 5.59%, while its lowest fixed rate will be 5.49%. With just a 0.10 percentage point difference, and the possibility of further RBA cuts ramping up, it’s hard to see many people jumping at the chance to lock up their mortgage for the next three years.
“We expect banks big and small will continue cutting fixed rates over the next few months. We’ve already got four lenders with at least one fixed rate under 5%, however, this could well become the norm for banks by the end of the year. The majors might have to offer a fixed rate in the ‘4s’ if they’re serious about getting people to lock in their rate.”
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