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Commonwealth Bank Fixed Rate Loan

Features

Commonwealth Bank customers can know exactly what their repayments will be over the term of a fixed loan. This is ideal for those property buyers who want to keep to a budget and plan for their financial futures with certainty. Commonwealth Bank offers a variety of options in their fixed rate home loans including the ability to pre-pay interest on investment loans 12 months in advance, extended loan terms, the ability to split your home loan with other types of loans such as a variable loan and a rate lock feature – for a fee.

That rate lock feature allows borrowers to lock in the interest rate for the next 90 days for a one to five-year fixed loan. The fixed rate home loans are also available for seven, ten and 15 years, which are extended periods that many other home lenders don’t offer. Repayments can be weekly, fortnightly, or monthly. But if you have an interest only loan, you can only make monthly repayments.

The minimum loan amount is $10,000 and you can't increase the loan amount during the fixed term. At the end of the fixed term, the loan will convert to the standard variable rate. Customers can apply for another fixed rate term. There is a useful partial interest-offset account facility available on Commonwealth Bank fixed rate home loans. This means you can potentially reduce your interest and pay off your mortgage faster using your savings to offset the loan principal while having easy access to that money.

It is important to note, however, that fixed rate loans may not be your best option if you are planning to make extra repayments to reduce interest costs. The Commonwealth Bank caps early repayments at $10,000 per year and there is a fee associated with going over that limit. There is no redraw option.

Who is the Commonwealth Bank Fixed Rate Loan good for?

The Commonwealth Fixed Rate Loan would suit an owner occupier or investor customer who likes to certain about their finances and protected against future interest rate rises.

It may also suit home buyers who enjoy the security of a big four bank and who like some flexibility with their fixed home loan, such as using an offset account. However, if you plan on making extra repayments, there are restrictions, as are typical on fixed loans.

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Be sure to do your homework when deciding if the Commonwealth Bank Fixed Loan is right for you, as the comparison rate is quite high. If you are willing to look into a no-frills style home loan with a smaller bank, you may be able to take advantage of a cheaper loan in the long run. However, an advantage of opting for an established bank such as the Commonwealth Bank is the 24/7 customer service, excellent internet banking options and easy access to the many branches and ATMs all over Australia.

The loan also has some flexible features such extended loan terms, a partial offset account, not often offered on fixed loans, and the ability to make extra repayments, though they are capped at $10,000.

Commonwealth Bank Fixed Rate Loan Options

See the links below for more information on the various Commonwealth Home Loan options.

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Fixed Rates from

4.14%

Advertised rate

5.06%

Comparison rate
Pros
  • Can split the loan between fixed and variable portions.
  • Partial interest offset facility.
  • Security of a big four bank.
Cons
  • No repayment redraw option.
  • High comparison rate.
  • High upfront and ongoing fees.
Eligibility

Owner occupier or investors can apply.

No off the plan purchases or construction loans.

Must meet serviceability criteria.

Suitable For
  • First Home Buyers
  • Owner-Occupiers
  • Refinancers
  • Investors
Fees
  • Estimated upfront fees: $800
  • Discharge fees: $350
  • Ongoing fees: $8 monthly

Commonwealth Bank charges quite a few fees on fixed loans. The upfront fee is high and you’ll also pay a fee to split the loan. The bank also charges a monthly loan service fee as well as a sting of $750 each time you lock in a rate. On top of that, if you break the loan during the fixed term, such as paying it off entirely, your break costs may amount to thousands of dollars.

Features
  • Redraw facility
  • 100% offset account
  • Unlimited extra repayments
  • Weekly repayments
  • Fortnightly repayments
  • Monthly repayments
  • Loan allows split interest rate
About Commonwealth Bank of Australia

Being the largest bank in Australia, Commonwealth Bank is one of the big four banks in the country – alongside NAB, Westpac and ANZ. Commonwealth Bank has the greatest share of the country’s mortgage market and offers customers a wide range of financial products and services.

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