The Commonwealth Bank, Australia’s biggest bank, is offering massive discounts for new customers with big deposits, in a move that is likely to shake up the mortgage market.
CBA’s advertised rates for its Wealth Package has been slashed by up to 2.03 percentage points from the previously advertised offset rate of 6.6% for owner-occupiers paying principal and interest. The change brings the rate down to as low as 4.57% for new customers who own a hefty 40% of their home (60% LVR). The offer also includes an annual $395 fee.
RateCity.com.au showed the CBA Wealth Package rates, including offset account and $395 annual fee for owner-occupiers paying principal and interest:
|
LVR
|
Old advertised rate
|
New advertised rate
|
Change % pts
|
|---|---|---|---|
|
60% or below
|
6.6%
|
4.57%
|
-2.03%
|
|
60.01% – 70%
|
6.6%
|
4.6%
|
-2%
|
|
70.01% – 80%
|
6.6%
|
4.67%
|
-1.93%
|
|
80.01% – 90%
|
6.6%
|
5.24%
|
-1.36%
|
|
90.01% – 95%
|
6.6%
|
6.24%
|
-0.36%
|
And here are the rates for the CBA Extra Home Loan, for owner-occupiers paying principal and interest with no offset account and no ongoing fees:
|
LVR
|
Advertised rate
|
|---|---|
|
70% or below
|
4.69%
|
|
70.01% to 80%
|
4.79%
|
|
80.01% to 95%
|
5.64%
|
Among the big four competitors, CBA now offers the lowest variable rate loan with an offset account. See table below.
|
Big four banks’ lowest advertised rate with an offset
|
||
|---|---|---|
|
Bank
|
Lowest rate
– with offset
|
Conditions
|
|
CBA
|
4.57%
|
LVR 60%. $395 annual fee
|
|
|
5.94%
|
LVR 70%. $395 annual fee
|
|
|
6.37%
|
Loan size $750K+. $395 annual fee
|
|
|
5.74%
|
LVR 80%. $120 annual fee.
|
Sally Tindall, RateCity.com.au research director, said this move by CBA will force other big banks to consider restructuring their advertised prices.
“For years the big banks have been offering up special discounts to select customers that others can’t see,” Tindall said. “This move from CBA is hopefully a step closer to the end of this cloak of secrecy. Westpac, NAB, and ANZ will now be under pressure to drop the advertised prices on their package home loan rates, which are now significantly higher than what’s on offer from their biggest competitor.”
