CommBank cuts and hikes home loan interest rates

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on March 22, 2021
CommBank cuts and hikes home loan interest rates

This morning Commonwealth Bank cut to its 'lowest ever' two-year fixed interest rate for owner occupiers on its 'Wealth Package' mortgage.

However, two other CommBank mortgage interest rates were hiked.

Commonwealth Bank home loan cuts 

The two-year Wealth Package home loan rate was cut by 20 basis points down to 1.94% p.a. (3.93% p.a. comparison rate*) for owner occupiers paying principal & interest (P&I).

The minimum eligible loan size is $150,000 and the maximum loan-to-value ratio (LVR) is 95%.

The 'Wealth Package' line of home loans has no upfront home loan establishment fees, monthly home loan service fees or annual credit card fees, with borrowers paying an annual package fee of $395 instead. 

Below is how CommBank's home loan compares to other lenders in the market across both fixed and variable terms for owner occupiers, keeping in mind the comparison rate.

Lender

Variable
More details
  • Min 30% deposit
  • No monthly or ongoing fees, add 0.10% for offset
  • Unlimited redraws

Variable Home Loan (LVR < 70%)

  • Min 30% deposit
  • No monthly or ongoing fees, add 0.10% for offset
  • Unlimited redraws
Variable
More details
REFINANCE ONLY
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
REFINANCE ONLY

Variable Rate Home Loan – Refinance Only

  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
NO ONGOING FEES
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
NO ONGOING FEES

Yard PAYG Home Loan (Principal and Interest) LVR ≤ 80%

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of August 10, 2022. View disclaimer.

Various other packaged and non-packaged CommBank home loans for owner occupiers were also cut by either 10 or 20 basis points.

Commonwealth Bank home loan increases

Notably, however, a couple of CommBank home loans were raised by 20 basis points, as seen below: 

  • Wealth Package OO Fixed P&I 4 Years: Up to 2.19% p.a. (3.73% p.a. comparison rate*)
  • OO Fixed P&I 4 Years: Up to 2.34% p.a. (3.96% p.a. comparison rate*)

The 4-year 'Wealth Package' rate hike is notable, because this was CommBank's first foray into the sub-2% home loan world following the Reserve Bank's 'Melbourne Cup cash rate cut' in November.

This rate hike for longer fixed-term loans follows on from last week when Adelaide Bank made similar changes.

There could be various explanations for this, with financial markets 'pricing in' a Reserve Bank rate hike earlier than initially anticipated, as well as a change to the Term Funding Facility taking effect from July.

Some pundits predict this will spell an end to 'record low' fixed home loan rates.


Photo by Maksym Kozlenko on Wikimedia Commons



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Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison strives to deliver and edit news and guides that are engaging, thought-provoking, and simple to read.

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