Commonwealth Bank slashes home loan rates by up to 70bp

CommBank rounded out a big week in home loan rate movements by slashing its offerings for borrowers looking for variable or fixed interest rates.

The biggest big four bank took the lead from NAB and Westpac, with the former making the first rate cutting move in late-July and the latter earlier this week.

However, CommBank led the way in one arena, taking the mantle as the first major lender to drop variable rates since NAB did so in April.

Mortgage market watchers have been keeping a close eye on CommBank's rate offerings in recent weeks, given it's the most bullish on the Reserve Bank of Australia (RBA) board cutting the cash rate.

Its economists forecast the RBA board's first downwards move will come in November - two months ahead of predictions from ANZ and Westpac and around five months before NAB's expectations.

Not to mention, CommBank was the first major domino to fall in the term deposit space, which has seen considerable rate cuts this week.

So, what went down with CommBank's advertised home loan interest rates on Friday? Let's dive into the nitty-gritty details.

See how CommBank's rate cuts could impact your repayments: Home loan repayment calculator

CommBank cuts variable home loan rates by up to 35 basis points

If you're considering taking out a new home loan or refinancing your existing mortgage, today's variable rate cuts from the nation's largest lender may be worth paying attention to.

Borrowers have flocked to variable rates this year, with fixed rate mortgages making up less than 3% of home loan lending in the month of June, according to ABS figures.

Variable rate cuts for owner-occupier mortgages

Variable rate cuts on the bank's Extra home loan product, for owner-occupier borrowers making principal and interest repayments and borrowing $150,000 or more, include:

Product	LVR	Change	New rate (p.a.)	Comparison rate* (p.a.)
Extra	<60%	-15bp	6.44%	6.45%
Extra	60-70%	-20bp	6.49%	6.50%
Extra	70-80%	-20bp	6.59%	6.60%
Extra	80-90%	-25bp	6.89%	6.90%

Meanwhile, the same borrower considering the bank's Standard Variable home loan with the Wealth Package add-on can also realise lower rates.

CommBank's Wealth Package promises a discounted interest rate (based on a borrower's loan-to-value ratio (LVR)), as well as waived establishment, monthly service, and credit card fees (on one eligible credit card).

The package comes at an additional cost of $395 per year, hence loans including it advertise higher comparison rates.

Product	LVR	Change	New rate (p.a.)	Comparison rate* (p.a.)
Standard Variable Rate with Wealth Package	≤60%	-15bp	6.34%	6.72%
Standard Variable Rate with Wealth Package	60-70%	-20bp	6.39%	6.77%
Standard Variable Rate with Wealth Package	70-80%	-20bp	6.49%	6.87%
Standard Variable Rate with Wealth Package	80-90%	-15bp	6.79%	7.16%

Variable rate cuts for investor home loans

Investors weren't left out of today's interest rate moves from CommBank.

Rates were dropped on some of the bank's Extra product line up for investors by one to 35 basis points to between 6.64% p.a. and 7.29% p.a. (new comparison rates* range from 6.65% p.a. and 7.31% p.a.).

Meanwhile, investors looking at the bank's Standard Variable Rate product with the Wealth Package add on, who plan to borrow $150,000 or more and make principal and interest repayments, could rejoice in these changes:

Product	LVR	Change	New rate (p.a.)	Comparison rate* (p.a.)
Investment: Standard Variable Rate with Wealth Package	≤60	-6bp	6.54%	6.92%
Investment: Standard Variable Rate with Wealth Package	60-70%	-6bp	6.59%	6.97%
Investment: Standard Variable Rate with Wealth Package	70-80%	-1bp	6.69%	7.06%
Investment: Standard Variable Rate with Wealth Package	80-90%	-35bp	7.04%	7.41%

CommBank slashes fixed interest rates by up to 70 basis points

It perhaps wasn't such a shock to the market that CommBank also cut its fixed rate line up on Friday.

After all, NAB, Macquarie Bank, and Westpac have done so in recent weeks (and Bank of Queensland's ME Bank joined in this week too).

Interestingly, even in the wake of today's cuts, CommBank's advertised fixed rates are significantly higher than those advertised by its peers.

Westpac, for instance, offers rates as low as 5.89% p.a. to borrowers fixing their rates, while NAB's lowest is 5.99% p.a.

If you've been following along with previous changes, you'll be aware that banks typically change their fixed rate offerings when they expect interest rates more broadly (ergo, the cash rate) to shift in the not-so-distant future.

That could be good news for borrowers holding out for even more variable interest rate cuts.

Rate cuts for owner-occupier home loans

Changes made to CommBank's advertised fixed rates for owner occupiers making principal and interest repayments include:

Product		Change	New rate (p.a.)	Comparison rate* (p.a.)
One year fixed		-20bp	6.54%	8.68%
	With Wealth Package	-20bp	6.39%	8.27%
Two years fixed		-55bp	6.44%	8.43%
	With Wealth Package	-55bp	6.29%	8.08%
Three years fixed		-70bp	6.04%	8.10%
	With Wealth Package	-70bp	5.89%	7.80%
Four years fixed		-40bp	6.44%	8.03%
	With Wealth Package	-40bp	6.29%	7.77%

As with its variable rate lineup, CommBank offers the Wealth Package on its fixed rate home loans, which could see a borrower realising a lower interest rate in return for a $395 annual fee.

Rate cuts for investment mortgages

And finally, investors got their fair share of fixed rate cuts too, with new rates advertised by the lender including:

Product		Change	New rate (p.a.)	Comparison rate* (p.a.)
One year fixed		-5bp	6.74%	9.21%
	With Wealth Package	-5bp	6.59%	8.79%
Two years fixed		-55bp	6.49%	8.89%
	With Wealth Package	-55bp	6.34%	8.53%
Three years fixed		-55bp	6.24%	8.55%
	With Wealth Package	-55bp	6.09%	8.25%
Four years fixed		-45bp	6.49%	8.39%
	With Wealth Package	-45bp	6.34%	8.13%

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_{Image courtesy of the Commonwealth Bank of Australia}