CommBank drops fixed rate home loans with investors snagging the biggest discount

With yesterday marking the official start to Autumn property season, major bank CommBank have dropped some of their fixed rates home loans in an effort to entice new borrowers.

Owner occupier, principal and interest loans with 1 and 2 year fixed rates have dropped 10 basis points, while 5 year fixed rates have jumped 20 basis points.

Mozo crunched the numbers on CommBank’s previous 3.99% fixed rate (5.05% comparison rate*) for one year and found that on a $300,000 loan over 30 years, it would incur a monthly repayment of $1,430.52. The new 3.89% (5.04% comparison rate*) rate would mean monthly repayments for the same owner-occupier loan would drop to $1,413.29 - a difference of just $17.23.

“These discounts on shorter fixed rate terms by Commonwealth Bank are an indication of the bank’s expectations for official rates to remain flat over the next year,” said Mozo Director, Kirsty Lamont.

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And while CommBank may have increased their 5 year fixed rates by 20 basis points, Mozo found that the new rate of 4.39% (4.98% comparison rate*) still proved to be lower than big bank’s NAB and ANZ, both offering a fixed rate of 4.59% (4.87% comparison rate*).

It’s Aussie investors who will see the biggest change, as interest-only fixed 2 year loans fell by 50 basis points, bringing their monthly repayments on a $300,000 loan over 30 years down from $1,172.50 to $1,0457.50.  

“This suggests CommBank have plenty of room to move within APRA’s lending guidelines and makes them the second big bank to change fixed rate loans, following ANZ last month,” Lamont said.

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“We predict that this will certainly stir up competition amongst the rest of the Big Four, prompting them to reconsider their fixed rate deals.”

But according to Lamont, Aussie customers should still be looking to play the field with their home loan, looking beyond major lenders and aiming for a rate under the 4% mark.

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“There are heaps of really competitive rates around at the moment, so it only makes sense to take advantage of that and snag yourself the best possible deal,” said Lamont. 

So if you’re thinking of entering the property market this year, then head over to our home loan comparison tool to check out some of the current offers.

*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.