Thursday, May 25, 2023
HomeMortgageCBA raises wealth package home loan rate

CBA raises wealth package home loan rate


Australia’s largest bank, Commonwealth Bank of Australia (CBA), announced today that it is raising the rate on its Wealth Package home loan for new customers with substantial deposits.

This move is the bank’s fourth rate increase for new customers in the past three months, in addition to the standard hikes by the Reserve Bank of Australia (RBA).

The latest rate adjustment adds 0.1 percentage points to the Wealth Package home loan rate for new customers, leading to a total increase of 0.82 percentage points since March 1, 2023.

Existing customers have experienced a rise of 0.5 percentage points, leaving new customers with an additional 0.32-percentage-point increase.

Changes to CBA’s Wealth Package loan – new customers only

For owner-occupiers paying principal and interest – contact RateCity for other variations









Deposit size

 

Old rate

 

New rate

 

Change % pts

 

40% or more

 

5.79%

 

5.89%

 

+0.1

 

30% or more

 

5.89%

 

5.99%

 

+0.1

 

20% or more

 

5.99%

 

6.09%

 

+0.1

 

10% or more

 

6.44%

 

6.44%

 

No change

 

Less than 10%

 

7.24%

 

7.24%

 

No change

 

Source: RateCity.com.au. Rates are for owner-occupiers paying principal and interest.

This change from CBA closely follows the recent rate hike by the National Australia Bank (NAB) on its basic variable rate for new customers.

Among the big four banks, there have been a total of 13 occasions where at least one advertised new customer rate has been increased since March 1, 2023, with Westpac having made a single increase.

Variable rate hikes from the big four banks since 1 March 2023

Note: these hikes are in addition to RBA increases

 
















Date

 

Bank

 

Loan

 

Change (in addition to RBA hikes)

 

1-Mar 23

 

CBA

 

Basic variable

 

up to 0.1% pts

 

1-Mar + 10-Mar 23

 

NAB

 

Basic variable

 

up to 0.2% pts

 

25-Mar 23

 

CBA

 

Basic variable

 

up to 0.7% pts

 

28-Mar 23

 

ANZ

 

Basic variable

 

up to 0.21% pts

 

31-Mar 23

 

CBA

 

Package loan

 

up to 0.2% pts

 

13-Apr 23

 

Westpac

 

Basic variable

 

0.1% pts

 

14-Apr 23

 

CBA

 

Package loan

 

up to 0.12% pts

 

21-April 23

 

ANZ

 

Basic variable

 

up to 0.1% pts

 

28-April 23

 

NAB

 

Basic variable

 

up to 0.05% pts

 

12-May 23

 

CBA

 

Basic + package

 

up to 0.1%

 

23-May 23

 

NAB

 

Basic variable

 

up to 0.1% pts

 

24-May 23

 

CBA

 

Package loan

 

up to 0.1% pts

 

Source: RateCity.com.au

 

Big four banks new lowest advertised rates 








 

 

With offset

 

No offset

 

CBA

 

5.89%


+ $395 annual fee

 

5.87%

 

Westpac

 

6.94%


+$395 annual fee

 

5.49%


for 2 yrs then +0.4%pts

 

NAB

 

7.07%


+$8 / mth fee

 

5.99%

 

ANZ

 

6.74%


+$10 / mth fee

 

5.79%

 

Source: RateCity.com.au. Note: rates are for owner-occupiers paying principal and interest. Loan-to-value ratios apply.

Sally Tindall, the research director at RateCity.com.au, expressed concern about the challenging situation faced by new customers seeking loans from Australia’s largest bank.

“CBA’s lowest advertised rate with an offset has now gone up by 0.82 percentage points in the space of three months,” Tindall said. “That’s 0.32 percentage points more than the rate rises customers have been subjected to.”

In addition to the rate hike, CBA will also eliminate its $2,000 cashback offer for refinancers in just over a week’s time.

The bank attributes the rising cost of funding as the driving factor behind the decision to protect profit margins, even if it means potentially losing out on new business.

“Last year, CBA was aggressively cutting new customer rates and offering cash incentives to encourage customers to switch,” Tindall said. “However, the banks have realized that this strategy has backfired, as the cost of refinancing has become more burdensome than anticipated.”

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