Mortgage rate cut to herald new price war?

The Commonwealth Bank has announced cuts to its fixed-rate mortgages, a move that could trigger a price war with its rivals.

It has revealed rates will be trimmed by as much as 0.4 per cent on its new one, three, four and five-year home loans.

These will be available from tomorrow (Friday September 7th) for new customers or switchers from variable deals and people looking to compare home loans will be keen to study the response of other mortgage lenders.

Commonwealth Bank said its fixed-rate deals are now at their lowest level in nearly three years, with its four and five-year offers at their cheapest in nearly a decade.

Finding an improved deal could be a good way for homeowners starting to struggle with their payments to stay on top of the cost.

Last month, the Fitch Rating Dinkum Index revealed 14,000 families in Victoria are behind with repayments, up from 11,000 a year ago.

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