How CommBank’s recent home loan rate cuts measure up

By JP Pelosi · · 3 min read
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Customers outside of Commonwealth Bank

CommBank reduced interest rates for borrowers on its Extra Home Loan and CommBank Wealth Package recently, positioning these loans more favourably against the averages in the Mozo database.

The bank’s Extra Home Loan saw cuts of up to 35 basis points (bp), which places its variable loan for owner occupiers well below the average in our database. More on that in a moment. 

CommBank Extra Home Loan 60% LVR 

The lowest rate available on this loan is on a 60% loan-to-value ratio and is now 6.44% p.a. (6.45% comparison rate*), down 15bp, as per Mozo data.

This puts CommBank in pretty good stead among the home lending competition generally (for 60% LVR). 

CommBank Wealth Package 60% LVR

Variable rates under the CommBank Wealth Package are down by similar amounts and now start from 6.34% p.a on 60% LVR (6.72% comparison rate*).

Keep in mind that the average rate for an owner-occupier (P&I) $400,000 variable home loan with 60% LVR is 6.71% p.a., as per the Mozo database as at September 4, 2024.

CommBank Wealth Package  80% LVR 

Meanwhile, the rate on an 80% LVR for the CommBank Wealth Package is 6.49% p.a. (6.87% p.a. comparison rate). 

This is especially notable given that the home loan average for owner occupiers (P&I) on an 80% LVR is 6.79% p.a., as per the Mozo database as at September 4, 2024. 

CBA expects interest rate cuts

CommBank hasn’t typically offered home loans at the cheaper end of the spectrum but it appears to be making a push for more home buyers ahead of a potential interest rate cut by the Reserve Bank this year. 

That at least is the speculation of some experts, including those from the big four bank itself. 

In its August Market Outlook, CommBank’s chief investment officer Jason Todd said the bank expects “a gradual economic recovery alongside further inflation deceleration and modest rate cuts.” 

Other banking experts haven’t been so convinced of a coming rate cut in 2024.

Home loan rates on the lower side

Meanwhile, some of the cheaper variable home loans in the Mozo database as of September 4 include:

Fixed home loan rate cutters

Fixed rates are clearly heading down now with more lenders starting to cut across all terms, including two of the major banks (CBA and Westpac) and some leading second-tier banks (such as Macquarie Bank and HSBC).

Among the cutters, CommBank reduced fixed rates for owner occupiers making principal and interest repayments down 20bp for 1 year, 55bp for 2 years, 70bp for 3 years and 40bp for 4 years. 

Rates for other borrower types saw smaller reductions. 

As at September 4, 2024, the average on a fixed rate $400,000 owner-occupier home loan (80% LVR) from the big four banks is 6.49% p.a., on a 1 year term. The average rate will vary based on the term of the loan.

You can compare some of the leading home loan rates on Mozo’s Home Loan hub page or simply start with the table below. 

*Variable and fixed home loan rates mentioned in this article are based on a $400,000 home loan. 

Note: The comparison rate gives you the ‘true’ cost of a loan by combining the interest rate and any additional fees or charges into a single percentage rate. This makes it easier to compare loans from different lenders.

Mozo may receive payment if you click the products below. We don’t compare the entire market, but you can compare more home loans here.
Last updated 16 September 2024 Important disclosures and comparison rate warning*

Home loan comparisons on Mozo

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  • Unloan Variable

    • Owner Occupier
    • LVR <80%
    Interest rate
    5.99 % p.a.
    Variable
    Comparison rate
    5.90 % p.a.
    Initial monthly repayment
    $2,995
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    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Neat Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $3,027
    Go to site

    Competitively-priced variable rate loan. Ideal for owner occupiers and investors. No service fees to pay. Make free extra repayments and redraws. Flexible repayment schedule available.

  • Fixed Express Home Loan

    • Owner Occupier
    • Principal & Interest
    Interest rate
    5.99 % p.a.
    Fixed 2 years
    Comparison rate
    6.14 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

    Lock in a low 2 year fixed rate with the Mozo award winning Home Lender of the Year. Available for live-in borrowers with just a 10% deposit required. Free extra repayments (up to 20% in fixed period), free redraw and partial offset available. $10 monthly service fee. Aussie support centre. Fast approvals. Up to 6 free offset accounts (T&Cs apply).

  • 3 Year Special Fixed Home Loan

    • Owner Occupier
    • Principal & Interest
    Interest rate
    5.69 % p.a.
    Fixed 3 years
    Comparison rate
    6.16 % p.a.
    Initial monthly repayment
    $2,899
    Go to site

    This home loan is available for purchase or refinance, complete with 1, 2 or 3 year fixed rate options. Minimum 10% deposit required.

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* 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. You can change the loan amount and term in the input boxes at the top of this table. 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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