0.13% drop: CommBank fails to pass on large portion of RBA rate cut to home loan customers
02 Oct 2019
The Commonwealth Bank became the first of Australia’s big four banks to respond to Tuesday’s RBA rate cut after making an announcement last night that it would cut 0.13% off variable home loan interest rates for its owner occupier borrowers.
The move from Commbank follows on the heels of the RBA’s decision to slash 0.25% off the official cash rate at its October meeting in Sydney yesterday, with the rate now sitting at an historic low of 0.75%.
The Commonwealth Bank's move will impact a number of owner occupier and investor home loans, with the changes coming into effect on 22 October, 2019.
The changes
• 0.13% reduction to Standard Variable Rate home loans for owner occupiers making principal and interest repayments. New rate will sit at 4.80% (4.95% comparison rate*)
• 0.13% reduction to Standard Variable Rate home loans for owner occupiers making interest-only repayments. New rate will sit at 5.29% (5.44% comparison rate*)
• 0.13% reduction to Standard Variable Rate home loans for investors making principal and interest repayments. New rate will sit at 5.38% (5.53% comparison rate*)
• 0.25% reduction to Standard Variable Rate home loans for investors making interest-only repayments. New rate will sit at 5.64% (5.79% comparison rate*)
Angus Sullivan, Group Executive Retail Banking Services at the Commonwealth Bank, said that the bank weighed up the interests of both borrowers and savers in the decision.
“As the Reserve Bank cash rate has reached record lows, we face a difficult balancing act between the multiple, valid interests of our stakeholders. Particularly given it is currently not feasible to pass on the full rate reduction to more than $160 billion of our deposits which are at, or near, zero rates," he said.
“In balancing these interests, we have carefully considered how to best meet the needs of over 6 million savings customers – who may find it challenging to make ends meet with record low savings interest rates – with the needs of our 1.6 million home loan customers, who want to pay less on their mortgages."
RELATED: Interest rates hit 0.75% after October RBA meeting, so has your lender passed on the full cut?
However, Commonwealth Bank mortgage customers may be less than happy with the decision, as the bank has now failed to pass on the full 0.25% RBA rate cut for a second consecutive time.
In fact, since the Reserve Bank first cut rates in June 2019 the Commonwealth Bank has only passed on 0.57% to variable home loan customers, despite the official cash rate having fallen by 0.75% over that same period.
This is in stark contrast to a handful of challenger and online lenders, with the likes of Athena Home Loans and Homestar having already passed on Tuesday’s cut in full - that’s on top of passing on the full 0.25% June and July RBA cuts as well.
The Commonwealth Bank's Standard Variable rate offer, which offers rates from 4.80% (4.95% comparison rate*), also remains well above the current average variable home loan rate for owner occupiers making principal and interest repayments in the Mozo database.
As of October 1, the average rate in the Mozo database sat at 3.87%, and it’s likely to fall further even further as other lenders make adjustments to their own rates following the RBA cut.
RELATED: Athena Home Loans springs into action, passes on full 0.25% cut
Ready to compare your existing home loan rate to other offers on the market? Check out some of the competitive rates in the table below, or check out Mozo’s home loans comparison tables for an even more extensive range of deals.
Compare home loans 2019
Rates updated daily. Advertiser disclosure.
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Mozo experts choice awards won:
- Offset Home Loan - 2021
- Low Cost Home Loan - 2021
1.99% p.a.variable for 12 months and then 2.48% p.a.
2.47% p.a.
$1234
Product details Close detailsMozo experts choice awards won:
- Offset Home Loan - 2021
- Low Cost Home Loan - 2021
Smart Booster Home Loan
1 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR
1.99% p.a.variable for 12 months and then 2.48% p.a.
2.47% p.a.
A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required. Winner of two Mozo Expert's Choice Award for 2021.
Smart Booster Home Loan
A super low introductory rate home loan with no monthly or ongoing fees. Unlimited free redraws and unlimited additional repayments to help you build your equity and own your home sooner. Multiple loan splits available. (Rates revert after introductory period ends). 20% minimum deposit required. Winner of two Mozo Expert's Choice Award for 2021.
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1.99% p.a.variable for 12 months and then 2.48% p.a.
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2.47% p.a.
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$520
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$0.00
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$0.00
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yes - free
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yes - free
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Optional - with 0.10% additional interest
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80.00%
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$520
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$50,000
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$1,000,000
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Variable
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Principal & Interest
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Owner Occupier
-
Weekly, Fortnightly, Monthly
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Read our Mozo Review to learn more about the Smart Booster Home Loan
Details Close
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2.64% p.a.
2.64% p.a.
$1234
Product details Close detailsBasic Home Loan
Owner Occupier, LVR<80%, Principal & Interest
2.64% p.a.
2.64% p.a.
Flexible loan structure – create up to six loan accounts with different rate and repayment types. Free redraw from your loan using Macquarie Online.
Basic Home Loan
Flexible loan structure – create up to six loan accounts with different rate and repayment types. Free redraw from your loan using Macquarie Online.
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2.64% p.a.
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2.64% p.a.
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$0
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$0.00
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$400.00
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yes - free
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yes - free
-
no
-
80.00%
-
$0
-
$150,000
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$749,999
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Variable
-
Principal & Interest
-
Owner Occupier
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Monthly
-
Read our Mozo Review to learn more about the Basic Home Loan
Details Close
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2.34% p.a.
2.34% p.a.
$1234
Product details Close detailsUHomeLoan - Discount Offer
Owner Occupier, Principal & Interest
2.34% p.a.
2.34% p.a.
Enjoy a super low rate. $0 fees to consider. Fast and easy online application. Free redraw and free extra repayments. Flexible payment terms. Min 20% deposit required.
UHomeLoan - Discount Offer
Enjoy a super low rate. $0 fees to consider. Fast and easy online application. Free redraw and free extra repayments. Flexible payment terms. Min 20% deposit required.
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2.34% p.a.
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2.34% p.a.
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$0
-
$0.00
-
$0.00
-
yes - free
-
yes - free
-
no
-
80.00%
-
$0
-
$100,000
-
-
-
Variable
-
Principal & Interest
-
Owner Occupier
-
Weekly, Fortnightly, Monthly
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Read our Mozo Review to learn more about the UHomeLoan - Discount Offer
Details Close
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-
Mozo experts choice awards won:
- Home Loan Innovation - 2021
- Investor Home Loan - 2021
- Low Cost Home Loan - 2021
2.19% p.a.
2.19% p.a.
$1234
Product details Close detailsMozo experts choice awards won:
- Home Loan Innovation - 2021
- Investor Home Loan - 2021
- Low Cost Home Loan - 2021
Celebrate Variable Home Loan
<60% LVR, Owner Occupier, Principal & Interest
2.19% p.a.
2.19% p.a.
Fast and efficient online application. Automatic discounts as loan is paid off. Free extra repayments and redraw facility. Zero fees to consider. Min 40% deposit required. Winner of three Mozo Expert's Choice Award for 2021.
Celebrate Variable Home Loan
Fast and efficient online application. Automatic discounts as loan is paid off. Free extra repayments and redraw facility. Zero fees to consider. Min 40% deposit required. Winner of three Mozo Expert's Choice Award for 2021.
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2.19% p.a.
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2.19% p.a.
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$0
-
$0.00
-
$0.00
-
yes - free
-
yes - free
-
no
-
60.00%
-
$0
-
$100,000
-
$2,000,000
-
Variable
-
Principal & Interest
-
Owner Occupier
-
Weekly, Fortnightly, Monthly
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Read our Mozo Review to learn more about the Celebrate Variable Home Loan
Details Close
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2.44% p.a.
2.45% p.a.
$1234
Product details Close detailsBack to Basics Special
LVR<80%, Owner Occupier, Principal & Interest
2.44% p.a.
2.45% p.a.
No monthly account keeping fee, no ongoing annual fee and no loan establishment fee on new lending of $150,000 or more.
Back to Basics Special
No monthly account keeping fee, no ongoing annual fee and no loan establishment fee on new lending of $150,000 or more.
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2.44% p.a.
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2.45% p.a.
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$0
-
$0.00
-
$350.00
-
Yes - free
-
yes - free
-
no
-
80.00%
-
$0
-
$150,000
-
-
-
Variable
-
Principal & Interest
-
Owner Occupier
-
Weekly, Fortnightly, Monthly
-
Read our Mozo Review to learn more about the Back to Basics Special
Details Close
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^See information about the Mozo Experts Choice Home loans Awards
