From today, Commonwealth Bank has reduced interest rates for new customers who take out a packaged home loan with them, that is a loan bundled with other financial products such as a credit card or savings account.
Canstar’s Group Executive of Financial Services Steve Mickenbecker said while CBA was following a recent market trend to cut fixed rates, its moves were “really strong.”
“CBA is moving in front of the pack – they are the best priced (for fixed rates) out of the majors now, particularly for three and five-year investment loans,” Mr Mickenbecker said.
The largest cut of 0.30 percentage points applies to two of the bank’s five-year fixed principal and interest (P&I) owner-occupier home loans. This includes the Wealth Package Residential five-year principal and interest loan, which now has a rate of 4.09% (*comparison rate 4.95%).
The other cuts are by 0.10 percentage points and apply to three-year, four-year and five-year owner-occupier loans and two-year, three-year and four-year investor loans.
This includes CBA’s Wealth Package residential three-year fixed P&I rate, which is now 3.79% (comparison rate 4.98%) and its Wealth Package investment three-year fixed P&I rate, which is now 3.99% (comparison rate 5.44%).
CBA is the third of the big four banks to make rate cuts this year, while ANZ is yet to make a move since hiking variable interest rates in September last year.
Mr Mickenbecker said ANZ would most likely follow its major rivals and cut fixed rates in the near future.
National Australia Bank cut rates across some of its fixed home loans for owner-occupiers and investors in March after having hiked several variable home loan rates in January, while Westpac hiked and cut a number of its fixed rate package home loans in February.
Meanwhile, official housing finance figures out today showed lending to home buyers crept higher in February, marking the first monthly gain since July 2018.
While this was a positive sign, the figures indicate housing demand is much weaker than what it was a year ago, with the nation’s two largest property markets of Sydney and Melbourne still suffering house price declines.