Commonwealth Bank (CBA) increased its Standard Fixed and Wealth Package Fixed mortgage rates by 5 basis points each.
This change represents the third hike for the bank's four-year fixed rates this year.
These changes will not impact existing fixed rate loans according to CBA.
These are the current CBA rates for a $500,000 mortgage over 30 years paying principal and interest:
- Residential Fixed P&I 2 Years: Up by 5 basis points to 2.14% p.a. (4.26% comparison rate*)
- Residential Fixed P&I 4 Years: Up by 5 basis points to 2.44% p.a. (3.99% comparison rate*)
- Wealth Package Residential Fixed P&I 2 Years ($150k+): Up by 5 basis points to increase to 1.99% p.a. (3.94% comparison rate*)
- Wealth Package Residential Fixed P&I 4 Years ($150k+): Up by 5 basis points to 2.29% p.a. (3.76% comparison rate*)
"Our competitive home loan rates remain at historic lows and continue to provide value for customers," a CBA spokesperson told Savings.com.au.
"These changes reflect increasing funding costs and the broader economic recovery which is on-track despite the current restrictions."
Recent home loan rate changes
These rate hikes are off the back of CBA cutting to its 'lowest ever' two-year fixed interest rate on its Wealth Package in March.
Queensland Country Bank, MyState Bank, and Heritage Bank recently cut home loan interest rates.
Queensland Country Bank cut owner occupiers and investors rates on their 'Ultimate Package' by 50 basis points.
MyState Bank and Heritage Bank cut a variety of home loan rates by 5 to 15 basis points.
However the standard 'MO' of banks in recent months has been to increase rates, particularly to longer-term fixed rates.
This is due to a variety of reasons, including the Reserve Bank's Term Funding Facility (TFF) ending in June, which provided cheap funding to banks, at 0.10% p.a. on a fixed three-year term.
About $187 billion in total was drawn down from the TFF, leaving $20 billion on the table - mainly in funds allocated to smaller banks and ADIs.
CBA had the largest proportion of the TFF out of the banks, with $48 billion allocated.
Image by Sharvain Projects
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