CommBank slashes Extra Home Loan interest rate to 3.89%
Major bank CBA this morning announced cuts to its Extra Home Loan headline rate, bringing the rate for borrowers to a relatively competitive 3.89% (3.91% comparison rate*).
The CommBank Extra Home Loan is available for borrowers with as little as a 5% deposit, and for loan amounts starting from $10,000. On an average home loan of $300,000 over 25 years, today’s rate cut of 25 basis points could save a borrower as much as $12,434 in interest, compared to the loan’s former rate.
The CBA Extra Home Loan also comes with a $2,000 cashback offer for refinancers who apply before 30 November 2018 and have a loan of $250,000 or more funded by 31 January 2019.
While the rate cut is welcome news for Aussie borrowers after a trend of rate hikes from banks big and small, the change still leaves the Commonwealth Bank with one of the higher rates among the major 4 banks when looking at comparable loans.
In fact, CommBank was actually the last of the big 4 to cut rates on one of it’s basic home loan offerings recently.
“This is a welcome move from a big bank that brings CBA more into line with other major lenders,” Mozo Data Manager Peter Marshall said.
“A few years ago, borrowers might have had to look at online or challenger lenders to find the kind of rates big banks are now offering on these basic mortgages. What that means is more competition and choice for Australian borrowers, which is a benefit to the market.”
Big 4 home loan rates
|CBA Extra Home Loan||3.89% (3.91% comparison rate*)|
|ANZ Simplicity PLUS||3.81% (3.85% comparison rate*)|
|NAB Base Variable||3.69% (3.73% comparison rate*)|
|Westpac Flexi First||3.98% (3.99% comparison rate*)|
CommBank also dropped the introductory rate offers on the Extra Home Loan by 10 basis points apiece. The 2 year introductory rate, which is available to all borrowers, dropped to 3.84% for 24 months, reverting to 4.50% (4.40% comparison rate), while the 4 year introductory rate for first home buyers is now 3.94% for 48 months, reverting to 4.50% (4.33% comparison rate.)
Recent research from Gateway Bank revealed that a staggering 56% of Aussies are under mortgage stress, as cost of living skyrockets and household debt-to-income ratio creeps ever higher.
According to Gateway CEO, Paul Thomas, household debt-to-income ratios have hit as high as 189% as Aussies take on more and more debt to get a foot on the property ladder.
“Add to this the steep decline in household savings, which is currently at 1%, and you have yourself a recipe for mortgage stress,” he said.
So if you want to own your own home without mounting mortgage stress, the first step is to find a low rate home loan. Head over to our mortgage comparison to find some of the lowest rates around today.
*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.