Commonwealth Bank (CBA) has reduced its variable interest rate ahead of the Reserve Bank of Australia's (RBA) next meeting, further intensifying competition among lenders in the mortgage space.
Representatives from CBA confirmed that the major has slashed its owner-occupier, principal and interest variable home loan rate to 5.84%, effective today.
The move shines a spotlight on the growing competition with Australia's lender space. At present, more than 35 lenders Down Under offer variable rates less than 5.75%, including the likes of Mortgage House, People's Choice and Pacific Mortgage Group.
"We are always looking to deliver value to our home loan customers," said a representative from CBA. "Our Digi Home Loan allows tech-savvy homebuyers to self-serve online and take advantage of a fully digital application process, ensuring a seamless, efficient, and valuable lending experience."
CBA's new rate, a 0.06% drop, is exclusively available to new customers applying online with a 40% deposit. (Westpac only requires a 30%, while ANZ allows a 20% deposit.)
Existing CBA mortgage holders are excluded unless they refinance. CBA's Digi Home Loan and Simple Home Loan products further expand its offerings, the representative confirmed. The digital home loan products for new owner-occupied loans have a loan-to-value ratio of 60% or less, with a minimum new borrowings of $100,000.
The lender competition is good news for borrowers, many of whom are straddled with rising costs of living and who, coupled with lower benchmark rates, have the potential to borrow more for less.
But CBA's latest offering is not available directly to brokers. Instead, it’s part of the bank’s direct-to-consumer offerings, effectively bypassing brokers and underscoring a growing trend where banks are slowly moving away from the third-party broker channel.
Earlier today, National Australia Bank said it hired roughly 150 proprietary home lenders in 2025's first half, reducing its reliance on third-party brokers while simultaneously growing its own direct channel.
Adam Brown, NAB executive, broker distribution, told Australian Broker, "this isn’t about choosing between proprietary and broker channels — it’s about being great in both."
Meanwhile, Bank of Queensland (BOQ) also said in April that it was doubling down on its efforts to move away from the broker third-party channel, instead focusing on its proprietary network.
BOQ Group General Manager Broker and Strategic Partnerships Johnny Lockwood said the group is undergoing a "significant technological transformation" at the moment.
"We are focused on ensuring that our brokers have the best tools and support available as we transition to a new digital platform," he said. "This transformation is essential for providing a superior experience for both brokers and customers."
Lockwood added that roughly 70% of retail home loans are still currently originated through the broker channel.
Still, some critics argue that some banks are keeping the most competitive deals for in-house for themselves, effectively eroding broker relevance.
Critics argue that some banks are keeping the most competitive deals for in-house for themselves, effectively eroding broker relevance.
The RBA next meets May 19 to May 20 to discuss monetary policy. A rate cut is largely expected.
