Commonwealth Bank makes sweeping home loan rate cuts by up to 50 basis points

author-avatar By on February 14,2020
Commonwealth Bank makes sweeping home loan rate cuts by up to 50 basis points

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A few lenders cut home loan rates in the last week, with two banks cutting by up to 50 basis points.

There was relatively subdued activity on the home loan rate markets this week with the cash rate kept on hold at 0.75% earlier this month.

Among the few lenders adjusting interest rates this week were Commonwealth Bank, CUA, and MacArthur Credit Union (The Mac), with cuts to fixed rates observed across owner-occupier and investor loans.

For context, the table below displays some of the lowest-rate variable home loans currently on the market for owner occupiers: 

Provider
Ad rate
p.a.
Comp rate*
p.a.
Monthly
repayment
 
2.68% 2.74% $1,618 More details
2.69% 2.86% $1,620 More details

Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term. Rates correct as at 01 June 2020. View disclaimer.

Commonwealth Bank

Commonwealth Bank made interest cuts of up to 50 basis points to a range of fixed-rate terms across owner-occupier and investment loans – both package and non-package.

Owner-occupier

  • Residential Fixed IO 1 yr: 10 basis point cut to 3.94% p.a. (4.86% p.a. comparison rate*)
  • Residential Fixed P&I 1 yr: 30 basis point cut to 3.14% p.a. (4.79% p.a. comparison rate*)
  • Residential Fixed P&I 4 yrs: 30 basis point cut to 3.34% p.a. (4.45% p.a. comparison rate*)
  • Residential Fixed P&I 5 yrs: 30 basis point cut to 3.34% p.a. (4.35% p.a. comparison rate*)

Wealth Package Residential

  • Residential Fixed P&I 1 yr 150k+: 30 basis point cut to 2.99% p.a. (4.59% p.a. comparison rate*)
  • Residential Fixed P&I 4 yrs 150k+: 30 basis point cut to 3.19% p.a. (4.34% p.a. comparison rate*)
  • Residential Fixed P&I 5 yrs 150k+: 30 basis point cut to 3.19% p.a. (4.26% p.a. comparison rate*)

Investment

  • Investment Fixed IO 1 yr: 50 basis point cut to 3.54% p.a. (5.34% p.a. comparison rate*)
  • Investment Fixed IO 2 yrs: 40 basis point cut to 3.54% p.a. (5.18% p.a. comparison rate*)
  • Investment Fixed IO 3 yrs: 40 basis point cut to 3.54% p.a. (5.03% p.a. comparison rate*)
  • Investment Fixed IO 4 yrs: 50 basis point cut to 3.64% p.a. (4.93% p.a. comparison rate*)
  • Investment Fixed IO 5 yrs: 50 basis point cut to 3.64% p.a. (4.82% p.a. comparison rate*
  • Investment Fixed P&I 1 yr: 45 basis point cut to 3.34% p.a. (5.32% p.a. comparison rate*)
  • Investment Fixed P&I 2 yrs: 25 basis point cut to 3.34% p.a. (5.14% p.a. comparison rate*)
  • Investment Fixed P&I 3 yrs: 45 basis point cut to 3.34% p.a. (4.97% p.a. comparison rate*)
  • Investment Fixed P&I 4 yrs: 35 basis point cut to 3.44% p.a. (4.85% p.a. comparison rate*)
  • Investment Fixed P&I 5 yrs: 35 basis point cut to 3.44% p.a. (4.72% p.a. comparison rate*)

Wealth Package Investment

  • Investment Fixed IO 1 yr 150k+: 50 basis point cut to 3.39% p.a. (5.13% p.a. comparison rate*)
  • Investment Fixed IO 2 yrs 150k+: 40 basis point cut to 3.39% p.a. (4.99% p.a. comparison rate*)
  • Investment Fixed IO 3 yrs 150k+: 40 basis point cut to 3.39% p.a. (4.87% p.a. comparison rate*)
  • Investment Fixed IO 4 yrs 150k+: 50 basis point cut to 3.49% p.a. (4.79% p.a. comparison rate*)
  • Investment Fixed IO 5 yrs 150k+: 50 basis point cut to 3.49% p.a. (4.69% p.a. comparison rate*)
  • Investment Fixed P&I 1 yr 150k+: 45 basis point cut to 3.19% p.a. (5.12% p.a. comparison rate*)
  • Investment Fixed P&I 2 yrs 150k+: 25 basis point cut to 3.19% p.a. (4.97% p.a. comparison rate*)
  • Investment Fixed P&I 3 yrs 150k+: 45 basis point cuts to 3.19% p.a. (4.83% p.a. comparison rate*)
  • Investment Fixed P&I 4 yrs 150k+: 35 basis point cut to 3.29% p.a. (4.74% p.a. comparison rate*)
  • Investment Fixed P&I 5 yrs 150k+: 35 basis point cut to 3.29% p.a. (4.63% p.a. comparison rate*)

CUA

CUA made rate cuts of up to 36 basis points to three of its 3-year fixed rate home loans.

Notably, the credit union cut its rate for owner-occupiers paying principal and interest to a competitive 3-year fixed rate of 2.84% p.a. (4.26% p.a. comparison rate*)

  • 3 Year Fixed Owner Occupier P&I: 14 basis point cut to 2.84% p.a. (4.26% p.a. comparison rate*)
  • 3 Year Fixed Investor IO: 36 basis point cut to 3.34% p.a. (4.79% p.a. comparison rate*)
  • 3 Year Fixed Investor P&I: 36 basis point cut to 3.14% p.a. (4.73% p.a. comparison rate*)

MacArthur Credit Union

The Mac cut fixed-rates across 1-year, 2-year and 3-year terms for owner occupiers and investors, with its 3-year fixed rates getting the biggest cut of 50 basis points:

  • Standard Fixed 1 Year: 20 basis point cut to 3.49% p.a. (3.99% p.a. comparison rate*)
  • Standard Fixed 2 Year: 20 basis point cut to 2.99% p.a. (3.86% p.a. comparison rate*)
  • Standard Fixed 3 Year: 50 basis point cut to 3.09% p.a. (3.80% p.a. comparison rate*)
  • Investor Standard Fixed 1 Year: 20 basis point cut to 3.79% p.a. (4.73% p.a. comparison rate*)
  • Investor Standard Fixed 2 Years: 20 basis point cut to 3.79% p.a. (4.64% p.a. comparison rate*)
  • Investor Standard Fixed 3 Years: 50 basis point cut to 3.79 p.a. (4.56% p.a. comparison rate*)

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2019. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2019) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au and loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*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.

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author-avatar
Harrison joined Savings in 2020. He is a journalist with more than four years of experience, with previous stints at News Corp and financial comparison site Canstar. With a keen interest in personal finance, Harrison is passionate about helping consumers make more informed financial decisions.

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