Commonwealth Bank cuts rates by 20 basis points

The Commonwealth Bank has become the second of the big four banks to announce its interest rate decision, passing on 20 basis points to borrowers.

From December 10, the bank's standard variable rate will reduce to 6.40% per annum.

This follows NAB cutting its variable rates by 20 basis points to 6.38%, also from December 10.

The Commonwealth bank once again said that it had to "balance the needs of 1.8 million home loan borrowers with those of its 11 million depositors and its shareholders, who include 800,000 Australians who own its shares directly, and millions more Australians who own shares through superannuation funds" in making the decision.

"A significant factor impacting this balancing of needs has been the increased competition in the domestic deposit market which has benefitted many customers, including those who rely on interest earnings to meet their living expenses," said the bank.