This move comes after the bank decided to align with the Reserve Bank of Australia’s recent cash rate reduction and decreased variable mortgage rates by 0.25 percentage points.
According to a financial comparison site, ANZ continues to offer the most competitive one- and two-year fixed rates among the major four banks, while NAB provides the best rates for three-, four-, and five-year fixed terms.
These fixed rates are for owner-occupiers paying principal and interest.
Prior to the Commonwealth Bank’s announcement, five lenders had cut fixed rates since the RBA’s decision on May 20.
And 20 lenders had cut at least one fixed rate this month, Canstar found.
Currently, four lenders – BOQ, Community First Bank, Police Bank, and Queensland Country Bank – have rates at a minimum of 4.99 percent. Moreover, Bank Australia offers a green home loan at 4.94 percent.
“Fixed rates have been falling fairly consistently this year and we expect this activity will continue as banks price in the increasing likelihood of further cash rate cuts,” Canstar data insights director Sally Tindall said.
The Sydney suburbs where $1 million isn’t enough to buy a home
“CBA’s fixed rate cuts aren’t groundbreaking, but rather a bid to inch closer to its key competitors.”
Tindall said big and smaller banks were expected to continue cutting fixed rates in the next few months.
“The majors might have to offer a fixed rate in the (four per cent range) if they’re serious about getting people to lock in their rate,” she said.
She said some borrowers had “relished the calm” of a fixed rate and might look to lock in now, while others will wait for further tax cuts to bring lower rates.
“If you’re deciding between a fixed or variable rate, understand what might suit your finances and to some extent, your personality,” Tindall said.
“When you make a decision, take the time to look for a competitive rate.”
