CommBank jacks up interest rates

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CBA is shifting variable home loan rates for customers repaying interest, going to 5.25 per cent.

CommBank has joined the other three big banks. Picture: Bob Finlayson


COMMONWEALTH Bank is increasing interest rates for investors and owner-occupiers, but will give borrowers a slight headstart before the changes come into effect.

From Monday, May 8, CommBank’s standard variable rate for owner-occupiers will increase by three basis points to 5.25 per cent per annum, while investor loans will increase by 24 basis points to 5.80 per cent.

Interest-only investor loans will increase by 26 basis points to 5.94 per cent, while interest-only owner-occupier loans will increase by 25 basis points to 5.47 per cent.

The move comes hours after ANZ raised its rates for investors, following NAB and Westpac, which began raising rates out of cycle with the Reserve Bank last week.

Despite the official cash rate remaining on hold at its historic low of 1.5 per cent, banks are raising costs for borrowers in a bid to keep a lid on growth in loans to property investors — and to protect their profit margins.

“Rising costs and regulatory responsibilities mean we are increasing home loan interest rates,” CommBank retail banking group executive Matt Comyn said in a statement. “We have sought to minimise the impact for the majority of our home loan customers who are Australian families trying to pay off their home.

“These changes don’t come into effect until 8 May, giving people enough time to speak to one of our home lending specialists to review their current repayments. We encourage customers to switch to principal and interest, where this meets their needs, so that they can continue to enjoy historically low rates.

“Customers can switch repayments at no cost, simply and easily online or over the phone. Or they can speak with one of our home lending specialists.”

CommBank says 77 per cent of its customers are ahead on their mortgage payments by an average of 2.9 years, and mortgage offset accounts are up 19 per cent in the first half of the financial year.

The bank points out that its standard variable rate for owner occupiers paying principal and interest has decreased by 40 basis points since March 2015, saving a typical customer $1051 per year.

CURRENT STANDARD VARIABLE RATES

OWNER-OCCUPIER

• CommBank: 5.25pc (up from 5.22pc)

• ANZ: 5.25pc (unchanged)

• NAB: 5.32pc (up from 5.25pc)

• Westpac: 5.32pc (up from 5.29pc)

INVESTOR

• CommBank: 5.80pc (up from 5.56pc)

• ANZ: 5.85pc (up from 5.60pc)

• NAB: 5.80pc (up from 5.55pc)

• Westpac: 5.79pc (up from 5.56pc)

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