CommBank hikes fixed home loan rates, yet cuts variable ahead of RBA decision

author-avatar By
on June 30, 2022 Fact Checked
CommBank hikes fixed home loan rates, yet cuts variable ahead of RBA decision

CommBank has moved to cut variable rates by 15 basis points, yet increased fixed home loan rates by 140 basis points.

Off the back of Macquarie's decision to cut variable rates by 25 basis points earlier this week, CommBank has responded with a 15 basis point decrease of its own. 

The decision comes with the RBA set to meet next week to determine the cash rate for July, with CommBank economists amongst the many others forecasting another 50 basis point increase. 

Taking into consideration the 50 basis point increase to variable rates earlier in the month, CommBank has moved variable rates north by 0.35% p.a in June. 

CommBank Chief Economist Stephen Halmarick said the hike might be shallower than market expectations.

"While our view of a shallow rate hike cycle is based predominantly on the impact on household balance sheets and spending from the coming large increase in mortgage funding costs, a tightening of fiscal policy will also support our monetary policy views," Mr Halmarick said. 

Key changes to CommBank's variable rate portfolio for owner occupiers and investors include:

  • Extra P&I <70%: 15 basis point decrease to 2.79% p.a. (2.80% p.a. comparison rate*)
  • Extra P&I 70-80%: 15 basis point decrease to 2.89% p.a. (2.90% p.a. comparison rate*)
  • Investment Extra P&I <70%: 15 basis point decrease to 3.09% p.a. (3.10% p.a. comparison rate*)
  • Investment Extra P&I 70-80%: 15 basis point decrease to 3.19% p.a. (3.20% p.a. comparison rate*)

At the opposite end of the ladder, CommBank has increased fixed home loan rates for new customers by 140 basis points.

This increase means Australia's largest bank is now offering a number of home loans for owner occupiers and investors beginning with a 6 or 7 - a significant change from 18 months ago when many of these fixed products enjoyed rates under 2.00% p.a.

Speaking to Savings.com.au recently, Samuel Philipos director of mortgage brokers Benevolence Financial Group (BFG) said a number of Australians are still favouring fixed rate loans for certainty.

"The logic behind this is that even though fixed rates are much higher, it’s about around certainty," Mr Philipos said.

"It’s the friction between lower short term costs and long term certainty and deciding between which of those two is more valued."

Key changes to CommBank's fixed rate portfolio for owner occupiers and investors all with 95% loan-to-value ratio include:

  • Residential Fixed P&I 3 Years: 140 basis point increase to 6.54% p.a. (5.79% p.a. comparison rate*)
  • Residential Fixed P&I 5 Years: 140 basis point increase to 6.84% p.a. (6.12% p.a. comparison rate*)
  • Residential Fixed IO 3 Years: 140 basis point increase to 6.99% p.a. (6.84% p.a. comparison rate*)
  • Residential Fixed IO 5 Years: 140 basis point increase to 7.29% p.a. (7.14% p.a. comparison rate*)
  • Investment Fixed P&I 3 Years: 140 basis point increase to 6.74% p.a. (6.59% p.a. comparison rate*)
  • Investment Fixed P&I 5 Years: 140 basis point increase to 7.04% p.a. (6.89% p.a. comparison rate*)
  • Investment Fixed IO 3 Years: 140 basis point increase to 6.84% p.a. (6.69% p.a. comparison rate*)
  • Investment Fixed IO 5 Years: 140 basis point increase to 7.14% p.a. (6.99% p.a. comparison rate*)

Advertisement

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Rates correct as of . View disclaimer.


Image by Harrison Astbury 



Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. 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. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

Latest Articles

author-avatar
Jacob Cocciolone joined the Savings team in 2021 as a Finance Journalist. Driven by a passion for keeping Australians up to date with the latest financial news and trends, his areas of interest include financial technology, investing, property and motoring.

Be Savings smart.
Subscribe for free money newsletters.

By subscribing you agree
to the Savings Privacy Policy