The biggest of Australia’s banks, the Commonwealth Bank, has slashed discounts across a range of its new home loan products by up to 0.15 basis points.
With interest rates at an all time low banks have been vying for customers in an increasingly competitive market. But as the Sydney property market shows signs of picking up once again, CBA has announced its lucrative discounts will be no more.
The changes mean that current discounts on new mortgage advantage packages for owner occupiers and investment home loans will be cut by 0.15%. Other products, such as the three-year special rate saver offer, extra life of loan product, and extra introductory rates on home loans, will also see discounts reduced by 8 basis points.
Although existing home loans won’t be affected, the newly reduced discounts will apply to home loans secured by customers both through CBA branches and through mortgage brokers, effective from this Friday, 26 August.
The change to discounting policy was blamed on the bank’s higher funding costs and the need to balance shareholders interests with those of its customers.
A spokesperson from CommBank said, that the "changes are required due to increased funding costs, capital requirements and our continued focus on balancing the needs of customers and shareholders."
Much the same reasoning was given by the big banks earlier this month, when they only partially passed on savings from the RBA’s decision to cut rates to a landmark low 1.50%.
Luckily, there are plenty of competitive home loan products still on offer at the moment. You can compare home loans side-by-side and find the right one for you at our comparison tables.