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The Commonwealth Bank has announced a raft of changes to interest rates on owner-occupied and investor home loans, with some rates dropping by 55 basis points.
Effective on 11 August, CBA is decreasing rates for both principal and interest (P&I) and interest-only (IO) fixed rate investment and owner-occupier loans, as well as cutting variable rates for its Extra 2 Year Introductory and Life of Loan products. The changes are applicable to both new and existing customers who transition into one of the affected products.
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Owner-occupier
The new rate for one and three-year fixed rate P&I owner-occupied home loans is 4.14 per cent per annum (p.a.), reflecting a cut of 0.40 per cent on the one-year fixed rate and 0.10 per cent on the three-year fixed rate. Five-year fixed rates will also fall by 0.20 per cent to 4.54 per cent p.a.
Interest-only rates will also be cut. Owner-occupier loans will be cut by 0.15 per cent for one-year fixed rates to 4.64 per cent p.a.
Investment
Investment loans will also be cut. Fixed rate P&I investment home loans will fall to 4.34 per cent p.a. (-0.40 per cent) for one-year terms, 4.39 per cent p.a. (-0.30 per cent) for three-year terms, 4.64 per cent p.a. (-0.35 per cent) for four-year terms and 4.64 per cent p.a. (-0.55 per cent) for five-year terms.
IO investment fixed rate home loans with one-year terms will fall by 0.15 per cent to 4.84 per cent p.a., loans with three-year terms will fall to 4.64 per cent p.a. (-0.30 per cent) and five-year fixed rates will fall by 0.10 per cent to 5.34 per cent p.a.
Variable rate P&I loans are falling by 0.03 per cent to between 3.89 per cent p.a. and 5.18 per cent p.a.
The changes follow a rough week for CBA, after the bank was found to have breached the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 through failing to adequately monitor and report deposits of $10,000 and more via its intelligent deposit machines.
CBA has also made headlines for its acquisition of Aussie Home Loans this week.
[Related: CBA to reduce commissions ‘imminently’: UBS]
