Commonwealth Bank has responded to the Reserve Bank of Australia’s cash rate decision by reducing home loan interest rates.
New Standard Variable Rates
- Owner Occupied Principal and Interest Standard Variable Rate home loans reduced by 0.13% per annum (p.a) to 4.80% p.a.
- Investor Principal and Interest Standard Variable Rate home loans reduced by 0.13% p.a. to 5.38% p.a.
- Owner Occupied Interest Only Standard Variable Rate home loans reduced by 0.13% p.a. to 5.29% p.a.
- Investor Interest Only Standard Variable Rate home loans reduced by 0.25% p.a. to 5.64% p.a.
New Fixed Rates
- 2 and 3 Year Owner Occupied Principal and Interest Fixed Rates in the Wealth Package reduced to 2.99% p.a. available from Thursday.
Commonwealth Bank has responded to the Reserve Bank of Australia’s (RBA) cash rate decision by reducing the Standard Variable Rate (SVR) for home loan customers by between 0.13% p.a. and 0.25% p.a.
“Today’s announcement means our SVR for Owner Occupied customers, with Principal and Interest repayments, will be at record low levels,” Angus Sullivan, Group Executive Retail Banking Services said.
“As the Reserve Bank cash rate has reached record lows, we face a difficult balancing act between the multiple, valid interests of our stakeholders. Particularly given it is currently not feasible to pass on the full rate reduction to more than $160 billion of our deposits which are at, or near, zero rates.
“In balancing these interests, we have carefully considered how to best meet the needs of over 6 million savings customers – who may find it challenging to make ends meet with record low savings interest rates – with the needs of our 1.6 million home loan customers, who want to pay less on their mortgages; and the needs of our shareholders, many of whom are retirees who rely on our dividend.
“In this environment, while reducing the SVR for home loan customers by between 0.13% p.a. and 0.25% p.a., we have also decided to limit the base rate reduction for savings customers in our popular NetBank Saver product to 0.05%. These changes are in addition to the fee removals, fee reductions and pre-emptive fee alerts we have already introduced, which have helped save our customers over $415 million.
“We are also announcing a new 2.99% p.a. 2 and 3 year Owner Occupied Principal and Interest Fixed Rate, available to new and existing Wealth Package customers taking out a Fixed Rate loan. This allows customers who prefer certainty to lock-in this historically low rate. This means we have reduced our 2 and 3 year Fixed Rates by 0.80% p.a. since July for Owner Occupied Principal and Interest customers,” Mr Sullivan said.
For Owner Occupied customers paying Principal and Interest, the SVR has reduced by 0.57% p.a. since June, which on a $400,000 home loan equates to a reduction in the minimum monthly repayment of $140 or an annual saving of $1680.
For Investor customers paying Interest Only, the SVR has reduced by 0.75% p.a. since June, which on a $400,000 home loan, equates to a monthly saving of $250 or an annual saving of $3000.
Customers who have questions regarding today’s rate change are encouraged to speak to one of our home lending specialists in branch or over the phone.
- The new SVR will take effect on 22 October 2019
- The new Fixed Rates will be available to new and existing customers switching to a Fixed Rate on 3 October 2019
- The NetBank Saver base rate reduction will take effect on 4 October 2019