Commonwealth Bank cuts fixed home loan rates

The Commonwealth Bank has hiked its fixed rate home loans by up to 60 basis points, one of the biggest increases of the year.

The Commonwealth Bank said the move was to ensure it "continue[d] to meet our regulatory requirements".

Fixed rates for one- to five-year products will range from 6.59% to 6.99%.

The CBA’s three-year fixed rate loan – traditionally the most popular fixed-rate loan type – has been raised by 40 basis points from 6.99% to 6.59%

Ross McEwan, group executive of retail banking services at the Commonwealth Bank, says: “Many customers want certainty with their home loan repayments, and we are pleased to take a lead and offer customers that peace of mind.”

However, fixed-rate customers might not feel that pleased should the RBA take drastic action in September and cut interest rates, as some economists predict might happen if the global situation worsens.

The CBA move follows ANZ cutting its fixed rate mortgages by between five and 15 basis points on August 1 along with Newcastle Permanent cutting its fixed rates by up to 10 basis points.

In June, Mortgage Choice recorded demand for fixed rates rising to 13.3% of all loan approvals compared to a 12 month average of 10.45% and up from 12.3% in May.