Commonwealth bank slashes fixed and variable rates

Another major bank has moved to slash fixed and variable rates, following other lenders including Westpac and NAB.

Commonwealth Bank has moved to slash fixed and variable rates in line with other lenders.

Owner-occupier and investor fixed rates at the major bank have reportedly dropped by up to 0.70 percentage points for one, two, three and four year terms for new borrowers.

New customer variable rates have also been slashed by up to 0.35 percentage points.

Commonwealth Bank now boasts a 5.89 per cent rate for a three-year-term in line with Westpac.

Canstar Data Insights director Sally Tindall said fixed rates will likely continue to drop, according to 9 NEWS.

“While it’s unclear just how far fixed rates will fall at this stage, it’s highly likely they’ve still got a way to go,” she said.

“We expect to see more fixed rate cuts in the weeks and months ahead, as central banks across the globe cut official rates and wholesale funding pressures hopefully continue to ease.”

Commonwealth Bank now has a 5.89 per cent rate for three-year-terms in line with Westpac. Picture: NewsWire / John Appleyard

A Commonwealth Bank spokesperson told NewsWire the reduction comes after an ongoing review of interest rates and market conditions.

“At CommBank we offer a range of tools and features to help customers manage their home loan,” the spokesperson said.

“For example, customers can use our budget planner tool to help estimate how they can manage their income and expenses to meet their goals.”

The news comes after Westpac on Tuesday announced it had lowered its owner-occupied and investment property fixed-rate loan prices.

Getting a fixed rate for one year on the home you will live in has dropped from 6.69 per cent to 6.19 per cent.

Being locked in for five years will have you paying 5.99 per cent on the principal and interest, 0.8 per cent lower than before.

Cuts to loans for investment properties are not as substantial, ranging from a 0.45 reduction to 6.34 per cent on a one-year fixed rate and a 0.70 cut for a five-year fixed rate of 6.19 per cent.

NAB also cut its three-year fixed rate on home loans by 0.6 per cent to 5.99 per cent last month.

The interest rate drop made NAB the first of Australia’s “big four” banks to offer prospective buyers a loan product with a ‘five’ in front of it, with the exception of Commonwealth Bank’s Unloan offerings.

RateCity research director Sally Tindall earlier called NAB’s move “strategic” to “test whether there’s any appetite among borrowers to revert back to fixing”.

Originally published as Commonwealth bank slashes fixed and variable rates