Commonwealth Bank raises fixed rates but drops variable interest on its cheapest home loans

A row of yellow Commonwealth Bank atms

The Commonwealth Bank (CBA) is the latest in the lending pack to make changes on its home loan interest rates, lifting fixed rates by as much as 30bp while lowering variable interest by 10bp.

Speculation that the RBA may soon raise the cash rate as early as August has fuelled the rate-change scramble, with many banks urgently hiking fixed rates back up to pre-pandemic levels.

RELATED: Property trends to watch out for in 2022

The table below shows the new fixed rates on the CBA basic home loan for owner occupiers making P&I repayments (<LVR 95%):

CBA Fixed Rate Home Loan - 25 March 2022

TermIncreaseCurrent Rate
1-year20bp2.94% p.a. (4.54% p.a. comparison rate*)
2-year30bp3.14% p.a (4.44% p.a. comparison rate*)
3-year30bp3.64% p.a (4.46% p.a. comparison rate*)
4-year30bp3.84% p.a (4.45% p.a. comparison rate*)
5-year30bp4.14% p.a (4.53% p.a. comparison rate*)

These rates now represent CBA’s lowest fixed rate option. 

CBA also decreased variable rates for their Extra Variable Home Loan Owner-Occupier product (<80% LVR) by 10bp. This brings it down to 2.39% p.a. (2.40% p.a. comparison rate*).

For context, the Mozo database shows that the current average variable rates for similar loan types is 3.09% p.a..

Lifting fixed rates but cutting variable rates has been a common move for banks in the last few months, as soaring interest may push frugal customers in the direction of variable home loans.

However, with variable rates predicted to rise in the near future alongside the RBA cash rate, fixed rate mortgages may remain the cheapest option long-term.

This latest fixed rate hike is unlikely to be the last in the coming months, so if you’re in the market for a new home loan, now may be a great time to pounce on the opportunity.

If you’re considering buying a home, head over to our fixed rate comparison tool to get started. You can also browse a curated selection of fixed rate home loans below.

1. Pay off quickly with free extra repayments and low interest for fixed period

UHomeLoan Owner Occupier, Principal & Interest

If you’re looking to take advantage of a low 1 year fixed home loan rate, UBank’s UHomeLoan (1 Year Fixed) could be a good place to start and end your search. UBank is currently offering a competitive 2.24% p.a. 1-year fixed rate (2.13% p.a. comparison rate*), plus, it comes with no ongoing fees throughout the life of your loan. Not only that, this loan gives borrowers the flexibility to make weekly, fortnightly or monthly repayments, as well as to make free extra repayments up to $20,000 within the fixed period.

2. Earn Qantas flyer points with no ongoing or upfront fees

Basic Home Loan (Fixed)

Want a home loan with competitive fixed rates on a range of terms and a tonne of handy features? Macquarie Bank’s Basic Home Loan (Fixed) may be exactly what you have been looking for. With a fixed three year rate starting at 4.19% (2.68% comparison rate*), no upfront or ongoing fees and free extra repayments and redraws, this loan is both easy on the wallet and flexible. Also a member with Qantas Frequent Flyer? Macquarie Bank also offer borrowers the option to earn Qantas Points over the life of the loan.

3. Refinance for a special discount fixed rate

Discount fixed rate

Lock in a competitive rate for 2 years. Only 20% deposit required. Flexible repayment options and make up to $5,000 in additional repayments annually. Refinance to BOQ by 15 April 2022 and get $3,000 cash back (T&Cs apply).

4. Low interest for a low deposit

G&C Mutual Bank Fixed Rate

If you’re on the search for a loan with low interest rates and deposits, G&C Mutual Bank’s Fixed Rate could be the right one for you. Owner occupiers can take advantage of the extra repayments, redraw facilities and low 1.98% p.a (2.03% p.a. comparison rate) for 1-year terms.

5. Split between the best of both worlds

Newcastle Permanent Fixed Rate Home Loan (Premium Plus Package)

If you’re after a home loan that offers a bit more than a low rate, then you need to check out the Newcastle Permanent Fixed Rate Home Loan (Premium Plus Package). This packaged loan comes with a competitive 2 year fixed rate of 2.89% (3.84% comparison rate*) for borrowers with an 80% LVR, but this loan has a maximum LVR of 95%, so you’ll be able to borrow with as little as a 5% deposit and receive a still competitive rate. And if you sign up to the Newcastle Permanent Fixed Rate Home Loan (Premium Plus Package), there’s a range of additional discounts up for grabs, like a $2,000 cash back offer for refinancers.

* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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