CBA cuts lowest variable interest rate to match big bank competitors

This cut of 0.06 percentage points applies to the bank’s digital-only home loan and is exclusive to new customers.

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Notes: Rates are for customers with at least a 40% deposit (LVR of 60% or less). Online only home loan. Loan also available to interest-only customers and customers with smaller deposits, however, higher rates apply. Loan includes an establishment fee of $300, a monthly fee of $10, although Yello cashback may apply and an offset account fee of $10/mth.

Three of the big four banks now firmly fixed in a mortgage rate war

Today’s move by CBA follows on from the launch of a new digital-only mortgage by Westpac in March. These moves have put CBA, Westpac and ANZ in a neck-and-neck race, with all three now offering a lowest variable rate of 5.84%.

All three rates are only available for customers applying online, however, CBA is the only one offering this rate to new borrowers and refinancers. CBA and ANZ’s loans can include an offset account for $10 a month, while Westpac’s does not.

CBA’s subsidiary, Unloan, offers a lowest rate of 5.74%, while NAB’s subsidiary ubank offers a lowest variable rate of 5.84%.

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Source: canstar.com.au – Lowest rates are for owner-occupiers paying principal and interest. Conditions apply as stated above and otherwise.

CBA adds new home loan option into the mix

Australia’s biggest bank has also added a new mortgage option for customers—its Simple Home Loan, which comes with the option of up to two offset accounts.

This new loan is currently available to customers who apply directly to the bank, however, the bank is planning to extend this option to third party brokers shortly. Brokers do not have access to CBA’s lowest rate loan, the Digi Home Loan.

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Notes: Loan also available to interest-only customers and customers with smaller deposits, however, higher rates apply. Loan includes an establishment fee of $300, a monthly fee of $20, although a $10 Yello cashback may apply and an offset account fee of $10/mth.

Big banks still trailing behind the low cost lenders

While the lowest big four bank variable rate is currently 5.84%, Canstar’s database shows there are over 35 lenders offering at least one variable rate under 5.75%.

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Source: canstar.com.au – 7/05/2025. Based on owner-occupier principal and interest variable rate loans. Excludes intro, eco and special condition loans. LVR and other conditions may apply.

Make the most of the mortgage rate war

Canstar’s Data Insights Director, Sally Tindall says, “CBA has dialled up the heat in the mortgage turf wars by matching two of its biggest competitors with a rate of 5.84 per cent.”

“This move is fantastic for competition because when Australia’s biggest bank cuts its home loan rates it forces other lenders to sit up and take stock of their own.”

“While this new lowest rate from CBA of 5.84 per cent is only for new customers with a 40 per cent deposit, it does not stop existing CBA customers from using this offer as a bargaining chip for their own rate negotiations.”

“If you are an owner-occupier with a variable mortgage with CBA, and your rate doesn’t start with a ‘5’, it’s time to ask the bank why?”

“With no advertised variable rate under 6 per cent, NAB is trailing behind the big bank pack, although its subsidiary, uBank, does offer variable rates as low as 5.84 per cent.”

“While CBA, Westpac and ANZ now offer a variable rate of 5.84 per cent, borrowers can do better than this if they’re willing to venture beyond the big banks.”

“As it stands, there are more than 35 lenders on the Canstar database offering at least one variable home loan rate under 5.75 per cent.”

“With the prospect of further cash rate cuts still firmly on the cards, potentially as soon as 20 May, variable rates could go well under 5.50 per cent in a matter of weeks.”

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