A big four bank has announced changes across its fixed home loan rates for new customers.
The changes at Commonwealth Bank of Australia (CBA) went live earlier this week.
Fixed rate three- and four-year owner occupied loans will decrease by 0.10%, while five-year loans will decrease by 0.30%. There will also be cuts of 0.10% for two-, three-, and five-year investment loans.
Steve Mickenbecker, Canstar group executive of financial services said, “The moves position Commonwealth Bank very competitively. The rate for owner occupiers for 3-years ranks tenth on Canstar's website. Investment loans rank even more strongly, with the 5-year fixed rate ranking second and the 3-year fixed rate coming in at number four.
“Commonwealth leads the big four banks across all of these terms.”
For new owner-occupied borrowers CBA’s P&I three-year fixed rate home loan will decrease to 3.79% while new investment borrowers will receive a new rate of 3.99%. Both changes have the potential to save consumers hundreds of dollars over the life of the loan.
According to Mickenbecker, the changes to the fixed rates come as a response to “the improved wholesale funding position of the banks over the longer term,” while the investment rate margin decreasing reflects “just how severe the drop off in demand for investment lending has been.”
Mickenbecker said, “This should set off another round of interest rate moves, of course centred on fixed rate loans. The itch is becoming irresistible.
“There are currently great deals available in fixed rates for anyone who is looking to lock in, even if there is a growing expectation that the RBA will cut its rate,” he concluded.