CBA cuts mortgage rates by up to 50 bps

The Commonwealth Bank of Australia (CBA) has reduced fixed rates across its owner-occupied and investment home loan products by up to 50 bps for borrowers with both principal and interest (P&I) and interest-only (IO) repayment terms.

The rate changes are effective for new applications submitted from 14 February.

For owner-occupiers:

• P&I fixed rates have been cut by up to 30 bps, and now start from 2.99 per cent (4.59 per cent comparison rate); and
• IO fixed rates have been cut by up to 10 bps and now start from 3.79 per cent (4.65 per cent comparison rate).

For investors:

• P&I fixed rates have been cut by up to 45 bps, and now start from 3.19 per cent (4.83 per cent comparison rate); and
• IO fixed rates have been cut by up to 50 bps, and now start from 3.39 per cent (4.87 per cent comparison rate).

“We regularly review our home loan pricing to ensure we continue to deliver competitive products for our customers, while maintaining our prudent lending standards,” a CBA spokesperson told Mortgage Business.

According to finance analyst at comparison site Canstar, Steve Mickenbecker, CBA’s pricing changes are yet another sign of heightened competition in the mortgage market.  

Mr Mickenbecker added that cuts of up to 50 bps on CBA’s investment products signal a “push in the investment market”.

“For the Commonwealth Bank, its interest-only investment loans are now a uniform [20 bps] higher than investment principal and interest loans, its lowest margin seen since APRA’s crackdown on investment lending,” he said.

“The rate changes have also impacted margins of [10 bps] and [20 bps] for principal and interest investment loans over the principal and interest owner-occupied rate.

“Prior to [the] changes, the margin for the popular three-year fixed principal and interest rate for investment loans was a whopping [65 bps] higher than for [owner-occupied] home loans.”

He added: “Both moves signal a push for growth in the investment lending market.”

[Related: Lenders charging loyalty tax, confirms RBA] 

Charbel Kadib is the news editor on the mortgages titles at Momentum Media.

Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.

You can email Charbel on: This email address is being protected from spambots. You need JavaScript enabled to view it.