Rate war looms: CBA, BoQ, Newcastle and ING cut rates after RBA decision

The Commonwealth Bank (CBA) today announced it will reduce interest rates on its standard variable rate (SVR) by 0.25% per annum.

Its three year and five year fixed rate products will also be reduced by 0.25% and 0.30% respectively.

The new SVR will take effect from 20 February 2015.

Standard variable rate (SVR) mortgage cut by 0.25% to 5.65%

• Five year fixed rate mortgage reduced by 0.30% to 4.69%
• Three year fixed rate mortgage reduced by 0.25% to 4.69%

The new SVR rate of 5.65% is the lowest since April 2009.

"Our fixed rates are now the lowest we have ever offered," said CBA's group executive retail banking services, Matt Comyn.

“As the nation’s largest lender, we are always seeking to deliver value to our 1.6 million home loan customers and today we are pleased to pass on the full benefit of the RBA’s recent interest rate reduction,” said Matt Comyn.

“Our new reduced standard variable rate of 5.65% is the lowest we have offered in five years, but beyond price, we are committed to ensuring our customers have the right tools, support and advice that will give them the best home buying experience.”

By reducing the standard variable home loan rate by 0.25%, home owners will save $48 a month, based on the average mortgage of $300,000.

CommBank has reduced its variable rate on home loans by 2.16 percentage points since 1 November 2011, equating to a saving of $430 in monthly repayments and an annual saving of $5,160 on a home loan of $300,000.

The Bank of Queensland has also announced it will pass onto its customers the full Reserve Bank cut, as hot competition to win borrowers is anticipated.

But it's decision has yet to be widely matched, other then ME Bank's quick announcement and ING.

The BoQ will lower its variable home loan and business term-loan rates from 24 February.

ING DIRECT will lower the interest rate on its variable mortgages by 0.25%, effective 20 February. 

Following this reduction, the rate on ING DIRECT's Mortgage Simplifier product will be 4.97% per annum.

ING DIRECT has a mortgage book of $38 billion.

BoQ’s Clear Path mortgage product’s variable home loan rate will be 4.62%, its standard variable-rate home loan at 5.76% and its variable rate on business term loans with residential security down to 7.25%.

Newcastle Permanent advised the 25 basis points represented a ­saving of $43 a month for $300,000 home loan holders with 25 year loans.

The non-bank lender Australian First Mortgage announced fixed rate cuts on two of its full-doc Flexible range products, just prior to the official RBA cash rate call yesterday.

Its four year fixed rate is down by 0.41% to 5.12%, and the five year fixed rate it is down by 0.26% to 5.22%.