CBA cuts mortgage rates by 0.2%

By in Australian Property

| 7 comments

By Leith van Onselen

The CBA has just matched NAB’s decision earlier today to cut mortgage rates by 0.20%, taking CBA’s standard variable mortgage rate to 6.40%, just above the 6.38% rate offered by NAB. From Property Observer:

The Commonwealth Bank has become the second of the big four banks to announce its interest rate decision, passing on 20 basis points to borrowers.

From December 10, the bank’s standard variable rate will reduce to 6.40% per annum…

The Commonwealth bank once again said that it had to “balance the needs of 1.8 million home loan borrowers with those of its 11 million depositors and its shareholders…

“A significant factor impacting this balancing of needs has been the increased competition in the domestic deposit market which has benefited many customers, including those who rely on interest earnings to meet their living expenses,” said the bank.

The pressure is now on Westpac and ANZ to match their Big Four rivals.

Comments

  1. Janet

    Okay. So illuminate me, someone. Peter Fraser notes that the variable rate is closer to 5.5%. Why, then, do the majors persist in advertising 6.4% ?

    • Klogg

      While they quote 6.4%, I’m sure that many of their ‘discounted’ products are sold at ~1% less than the standard variable rate (SVR).

      When I first got my loan, I was paying close to the SVR, then called and said ANZ were offering me approx. 1% less. So they matched it.

      With this 0.2% cut, my loan will be @ 5.4% through CBA.

      • Janet

        Thx for that. Now I understand why NZ has variable @ 4.75% off an OCR of 2.5%. Kiwis must be less sophisticated than Aussies!

    • Capitalist

      They only move in multiples of 25bp because moving in smaller multiples implies they know exactly what the rate should be when they don’t.