CBA trims home loan rates
Commonwealth Bank of Australia has dropped its interest rates on both variable and fixed home loans after its rivals National Australia Bank, ANZ Banking Group and Aussie Home Loans all reduced their rates over the weekend.
CBA will reduce its standard variable rate home loan by 21 basis points to 8.32%, and its basis variable home loan to 7.81%, the bank said in a statement.
The new rates apply to both new and existing customers and will take effect from Thursday October 30.
CBA also dropped interest rates on fixed home loans by up to 40 basis points for new customers, also effective from October 30.
No change has been made to a one-year fixed rate home loan.
Reductions apply for terms from three years, with the three-year fixed home loan reduced by 40 basis points to 7.29%.
Today's changes are the result of a reduction in the bank's cost of funding over the past week, group executive of Retail Banking Services Ross McEwan said.
''We have seen some reduction in our cost of funding over the past week and as Australia's biggest lender, the Commonwealth Bank is committed to remaining extremely competitive in the mortgage market,'' he said.
CBA's one-year guaranteed fixed home loan rate remains at 7.09%.
This product operates like a variable loan but includes the benefits of an offset option and mortgage interest saver (redraw) option.
CBA said today's move was made to remain competitive with its rivals.
Price war
Australia's big banks have entered into a price war on mortgages over the past three days after the ANZ Bank on Friday announced the first move on rates independently of the Reserve Bank of Australia in a decade.
ANZ dropped its interest rates on variable home loans by 25 basis points to 8.32% for new and existing customers, effective from October 27.
National Australia Bank (NAB) announced yesterday it was dropping its standard variable home loan rate by 20 basis points to
8.36%.
The 0.2 percentage point cut would apply also to business loans, and some rates on fixed mortgages would be reduced by 0.3 percentage points, NAB said in a statement.
NAB's one-year fixed home loan was cut by 30 basis points to 6.99%.
NAB's announcement came hot on the heels of Aussie Home Loan's decision on Saturday to drop its rate on variable home loans for first home buyers by 30 basis points to 7.79%.
Aussie Home Loans reduced interest rates for fixed home loans and will review its loan rates for new and existing customers, in line with its funding requirements, managing director John Symond told AAP.
Today's move by CBA matches ANZ's standard variable rate as the lowest on offer among lenders in the banking sector.
Rates on standard variable mortgages from Australia's major lenders now stand at 8.32% at CBA and ANZ, 8.36% at National Australia Bank, 8.56% at Westpac, 8.57% at St George Bank, and 8.6% at Bendigo and Adelaide Bank.
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