First of the majors announces rate cut

by Julia Corderoy04 Feb 2015
The first of the major banks has announced a rate cut, on the back of a number of non-majors announcing yesterday that they will pass on the full 25 basis point RBA rate cut to customers.

Commonwealth Bank has reduced interest rates on its Standard Variable Rate by 0.25% p.a. The 3 year and 5 year fixed rate products will also be reduced by 0.25% and 0.30% respectively. The new SVR will take effect from 20 February 2015. 

The new SVR rate of 5.65% is the lowest the major has offered since April 2009. Its fixed rates are also now the lowest ever offered too.

“As the nation’s largest lender, we are always seeking to deliver value to our 1.6 million home loan customers and today we are pleased to pass on the full benefit of the RBA’s recent interest rate reduction,” Matt Comyn, Group Executive Retail Banking Services said.

“Our new reduced standard variable rate of 5.65% is the lowest we have offered in five years, but beyond price, we are committed to ensuring our customers have the right tools, support and advice that will give them the best home buying experience.” 

By reducing the standard variable home loan rate by 0.25%, CBA says home owners will save $48 a month, based on the average mortgage of $300,000. 

The major lender has reduced its variable rate on home loans by 2.16 percentage points since 1 November 2011, which it says equates to a saving of $430 in monthly repayments and an annual saving of $5160 on a home loan of $300,000.