For the second time in two weeks, the Commonwealth Bank of Australia has hiked new customer rates on its package variable home loan.
The rates on CBA’s package variable home loan, which includes an offset account, was now up by 0.12 percentage points for new customers, after it was increased by up to 0.22pp in total since March 31.
A day before CBA’s rate move last week, rival Westpac lifted new customer variable rates by 0.1 percentage points for owner-occupiers and investors. NAB and ANZ raised select new customer variable rates last month.
RateCity.com.au showed in the table below the changes to CBA’s Wealth Package for new customer owner-occupiers paying principal and interest.
|
LVR required
|
Old rate
|
New rate
|
Change
(% points)
|
|---|---|---|---|
|
60% or less
|
5.34%
|
5.44%
|
+0.1
|
|
70% or less
|
5.42%
|
5.54%
|
+0.12
|
|
80% or less
|
5.52%
|
5.64%
|
+0.12
|
|
90% or less
|
6.19%
|
6.19%
|
No change
|
|
90.01% – 95%
|
6.99%
|
6.99%
|
No change
|
Note: A $395 annual fee applies
Australia’s biggest bank has also slashed its three-year fixed rate loan by 0.4pp for owner-occupiers and investors paying principal and interest. The three-year fixed rate for CBA’s owner-occupiers P&I and Investor P&I were now down to 5.59% and 5.69%, respectively.
Sally Tindall (pictured above), RateCity.com.au research director, said the aggressive discounting employed by the big four banks to new customer rates at the start of the RBA hikes was now in reverse.
“After 10 cash rate hikes and steep increases to wholesale funding globally, the big banks are now quietly slipping their biggest discounts off the table,” Tindall said.
“While the refinancing boom has driven banks big and small to offer competitive new customer rates, the unprecedented volume of loans now refinancing is no doubt putting added pressure on profit margins. It’s likely to be getting too expensive for the banks to hand out discounts of this magnitude at these volumes.”
Tindall also noted that while the majority of the big four bank fixed rate changes have been hikes so far this year, the tide is starting to turn as we approach the cash rate peak, particularly among smaller lenders.
“The RateCity.com.au database shows 16 lenders have taken the knife to fixed rates in the past two weeks, while just eight have hiked rates,” Tindall said. “That said, fixing is still very much on the nose. The latest ABS lending indicators show just 5% of new and refinanced loans opted for a fixed rate in February. With many economists predicting cash rate cuts in the next couple of years, it’s no surprise many Australians are deciding to keep their options open with a variable rate.”
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