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Commonwealth Bank has joined Westpac in breaking through the 5 per cent home loan interest rate barrier, introducing a new 2-year fixed rate special of 4.99 per cent. The major bank joins a growing list of lenders cutting their fixed rates “like dominoes” following last month’s cash rate cut by the Reserve Bank of Australia (RBA).
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A Commonwealth Bank spokesperson told Yahoo Finance the 2-year fixed rate would be available for principal and interest owner-occupied home loans for a limited time. To be eligible, customers must have at least 30 per cent equity in their home.
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“This offer is available through a CBA Home Lending Specialist or a mortgage broker to new borrowers, as well as existing variable rate customers who wish to switch or fix part of their loan,” the spokesperson confirmed.
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The move marks the first time Commonwealth Bank has offered a rate in the ‘4’s’ in the current cutting cycle. It follows Westpac’s fixed rate cuts on August 29, which saw its lowest advertised fixed rate drop to 4.89 per cent.
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Canstar data insights director Sally Tindall told Yahoo Finance more than 40 different lenders had cut at least one fixed rate since the RBA lowered the cash rate to 3.60 per cent last month.
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“Fixed rates have been dropping like dominoes on the back of the August cash rate cut,” Tindall said.
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“As a result, there’s now a smorgasbord of lenders offering fixed rates in the ‘4’s’ including Big Four bank Westpac, and now CBA.”
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Do you have an interest rates story to share? Contact tamika.seeto@yahooinc.com
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Westpac remains the market leader for fixed rates among the Big Four banks, holding the title across all periods except the 3-year fixed rate, where it shares first place with NAB with a 5.29 per cent rate.
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The lowest available rate on Canstar’s database is 4.64 per cent offered by Pacific Mortgage Group and Australian Mutual Bank for a 2-year term for owner-occupiers.
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Tindall said Commonwealth Bank’s move was designed to “turn heads” but noted it was only available for a limited time and borrowers needed to meet the eligibility criteria.
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While fixed rates are falling, Tindall said whether now is a good time to lock in would ultimately depend on your individual circumstances and goals.
