A major bank has announced fixed rate cuts of up to 0.80% across its investment and owner occupied home loans. The changes at Commonwealth Bank (CBA) went into effect Friday, 26 July.
The two, three, and five-year fixed rates for owner occupied loans decreased by between 0.51% and 0.61% for those paying P&I. The two- and three-year fixed rates for owner occupiers paying interest only decreased by between 0.45% and 0.50%.
For investment loans, the two, three and five-year fixed rates decreased by between 0.30% and 0.50% for those paying P&I. For investors paying interest only, the two, three and five-year fixed decreased by between 0.20% to 0.80%.
ANZ similarly implemented a round of fixed rate cuts across its range of home loan products the week prior, ranging from 0.25% to 0.96%.
According to Steve Mickenbecker, group executive of financial services at comparison site Canstar, the cuts at CBA ranging up to 0.80% "confirm just how competitive the market is for new lending."
"The larger cuts also demonstrate the current favourable conditions for long-term funding," he added.
Mickenbecker noted that while the most substantial cut was only for the five-year fixed investment loans, there were still "significant reductions" made across the entire range of products.
He said, "The reductions position the Wealth Package options at most fixed rate terms within the bottom quartile of fixed rate loans listed on Canstar's website."
However, while the lowered fixed rates may seem like an attractive option to new borrowers, it is likely that variable rates will sink below fixed if the RBA does cut the cash rate again this year, as predicted by Westpac chief economist Bill Evans, among others.