Commonwealth Bank leads big banks offering biggest discounts for big mortgages: RateCity

The Commonwealth Bank offers the most generous mortgage discounts for borrowers who take out loans greater than $750,000 among the four major banks.

This has been revealed in research carried out by financial comparison website ,  which confirms that borrowers who take on a bigger mortgage are being offered cheaper home loans, while many smaller mortgage borrowers are forced to pay higher interest rates.

The major four banks – ANZ, Commonwealth Bank, NAB and Westpac – all offer cheaper deals for bigger mortgages.

The Commonwealth Bank has the biggest spread, with 0.35 percentage points lower advertised variable rates for a home loan above $750,000 compared to a home loan below $250,000. 


Advertised variable rate for loans under $250,000

Advertised variable rate for loans above $750,000

Difference (percentage points)





Commonwealth Bank













Across the database, affluent customers, (borrowers who can afford a substantial mortgage such as more than $750,000) receive an average variable home loan rate of 5.32%, out of more than 100 lenders in RateCity’s database.

This is 0.42 percentage points lower than the average variable home loan rate for loans below $250,000.

Home loan size

Average advertised variable rate

Above $750,000


Below $250,000


Difference (percentage points



According to RateCity spokesperson Michelle Hutchison, lenders have a greater financial gain from borrowers taking on more debt.

“It comes down to the fact that bigger home loans are worth more money to lenders so they will make larger loan sizes more attractive by offering cheaper rates.

“Just as if you were to visit a supermarket to buy a bottle of soft drink, the bigger the bottle you purchase the less you pay per litre. In much the same way, a lender is willing to accept a lower rate per dollar when selling a larger amount of money.

“But just like a bottle of soft drink, bigger isn’t always better when it comes to borrowing and you shouldn’t take on more debt just to get a discount.”

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer


Be the first one to comment on this article
What would you like to say about this project?