Commonwealth Bank Announces Lowest Fixed Rate In History

On Monday 22 March and effective immediately, the Commonwealth Bank of Australia announced its lowest fixed rate ever released for home loans. 

The key updates released by CBA include – 

  • 20 bps reduction to 1.94% p.a. on new two year fixed rate home loans for owner occupiers paying principal and interest in the Wealth Package. This is CBA’s lowest fixed rate for home loans to ever be advertised; 
  • 30 bps reduction to 2.39% p.a. on new three year Fixed Rate home loans for Investors paying Principal and Interest in the Wealth Package. This is CBA’s lowest fixed rate for investors to ever be advertised; 
  • New digital splitting tool in NetBank and the CommBank app.

It would appear that Australia’s largest bank has bowed to pressure from rival lending institutions Westpac and NAB, by finally bringing its two-year fixed rate to under 2%. According to Michael Baumann, CBA’s Executive General Manager of Home Buying, it’s all in place for the benefit of consumers. 

“We know that customers are looking to lock in the certainty of fixed rates, with around 40 per cent of new customers fixing their loans to take advantage of the current record low rate environment. These changes allow homeowners and investors to take advantage of our lowest ever fixed rates, adding to our already market leading home lending solutions, including the recently announced CommBank Green Loan.”

Along with record low interest rates, yesterday’s announcement also comes as CommBank launches a new digital splitting tool for customers. The concept has been designed for customers looking to split their variable home loan, in order to best take advantage of the certainty of a fixed rate and the flexibility of a variable home loan.

Eligible customers can now split their home loan in NetBank and the CommBank app in a few easy steps,  by simply selecting the portion of their loan and the term they would like to fix. In real time, consumers are able to see how this split changes their repayments. 

“We have made it easier than ever for eligible customers to take advantage of the new fixed rates announced today, with the launch of this easy to use feature in the CommBank app and NetBank. There is a limited understanding from customers that they can split their loan, and this new tool gives customers even more control of their finances and the flexibility of redraw and offset,” Mr Baumann said.

However, the most significant change was the hike to the Commonwealth Bank’s four-year fixed rate. For owner occupiers, the four year fixed interest rate rose from 1.99% to 2.19%, making them the first of the big four banks to hike the four year rate since October 2019. Lending experts believe that this is a sign of things to come, and providing the economic recovery of Australia stays on track, consumers who fix their home loan rates today could very well see variable rates increase during that same period of time. 

A lock-in or rate lock on a mortgage loan means that your interest rate won’t change between the offer and closing, as long as you close within the specified time frame and there are no changes to your application. With the Australian real estate market picking up and gaining momentum, there’s never been a better time for consumers to seriously consider the benefits that rate lock has to offer. 

If thinking about your financial future strikes a chord with you, then it might be time to speak to a professional. With their entire business built on referrals, the team at Madd Loans have taken the mortgage broking industry by storm. Their overwhelmingly positive feedback has helped them to take out numerous industry awards, including the title of “Queensland’s Broker Of The Year” for four consecutive years. Get in touch with the team at Madd today to discuss your rate lock options and stay ahead of the market. 

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