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Australia’s biggest bank hikes fixed rates 4 times in 2 months

Australia’s biggest bank hikes fixed rates 4 times in 2 months

Australia’s largest bank, CBA, has increased fixed rates for owner-occupiers and investors for the fourth time in just over two months.

Today’s CBA hikes for owner-occupiers paying principal & interest - contact us for investor changes

Rate typeOld lowest rateNew lowest rateChange
1-year fixed

2.49%

2.54%

0.05%

2-year fixed

2.59%

2.69%

0.10%

3-year fixed

2.99%

3.14%

0.15%

4-year fixed

3.09%

3.34%

0.25%

5-year-fixed

3.39%

3.59%

0.20%

Note: Above rates are for owner-occupiers paying principal and interest on a package rate with an annual fee of $395. 

Previous CBA owner-occupier fixed rate hikes:

  • October 15: increased 2- to 4-year rates by 0.10%.
  • November 5: increased 1- to 5-year rates by up to 0.50%.
  • November 26: increased 1- to 5-year rates by up to 0.30%.

CBA hikes over the last two months

Since 14 October, CBA’s 4-year fixed rate has increased by a total of 1.05 percentage points, while its 3-year rate has increased by 0.95 percentage points. 

14 OctoberTodayChange 

(% points)

Diff. in repayments ($500K)
1-year fixed

2.09%

2.54%

0.45%

$115

2-year fixed

1.99%

2.69%

0.70%

$180

3-year fixed

2.19%

3.14%

0.95%

$250

4-year fixed

2.29%

3.34%

1.05%

$279

5-year fixed

2.99%

3.59%

0.60%

$165

Source: RateCity.com.au. Note: monthly repayments are for the fixed rate term and are based on an owner-occupier paying principal and interest taking out a $500,000, 30-year loan. 

RateCity.com.au research director, Sally Tindall, said today’s hikes from CBA were relatively small, however, they were starting to add up.

“The spike in the cost of funding has sent fixed rates soaring, with both CBA and Westpac hiking fixed rates four times in the last two months. As a result, CBA’s 4-year rate has risen by over a full percentage point in this time,” she said.

“CBA’s fixed rates with terms of 3 years and more are now higher than pre-pandemic levels.

“These fixed rates hikes aren’t isolated to the big four banks. The rate rises are coming in across the board from lenders big and small and we expect them to continue.

“The average borrower taking out a $500,000, 3-year fixed rate loan with CBA today will be paying $250 more a month than someone who took out the same loan two months ago.

“Anyone in CBA’s queue for a fixed rate who didn’t pay a rate lock fee will be particularly grumpy at today’s news.

“A rate lock fee is next to useless when fixed rates are on their way down, but in this environment where banks are hiking rates multiple times in a matter of weeks, it’s well worth the consideration,” she said.

Rate lock fees – how the largest lenders stack up

LenderRate lock fee $500k loanRate lock fee $1m loan
ANZ

$750 

$750 

CBA

$375 

$375 

NAB

$750 

$1,500 

Westpac

$500 

$1,000 

Note: some lenders charge a flat rate lock fee, others charge the fee as a percentage of the borrowed amount.

What is a rate lock fee?

A ‘rate-lock fee’ is a fee a customer pays to lock in the fixed rate on offer at the time of application (or any time before settlement), protecting them from any rate rises during the process.

The ‘lock’ typically last for around 90 days, but this can differ between lenders.  

Rate lock fees can run into the thousands of dollars, however, it differs between lenders and in some cases on the size of the loan, with some banks charging a flat fee and others charging a percentage of the loan.

Lowest big four bank owner-occupier home loan rates

CBAWestpacNAB ANZ
1-year fixed

2.54%

2.34%

2.49%

2.39%

2-year fixed

2.69%

2.49%

2.59%

2.59%

3-year fixed

3.14%

2.89%

3.09%

2.99%

4-year fixed

3.34%

3.19%

3.29%

3.39%

5-year-fixed

3.59%

3.39%

3.49%

3.59%

Variable

2.29%

2.19%

2.29%

2.29%

Source: RateCity.com.auNote Rates are for owner-occupiers paying principal and interest, LVR requirements apply for some loans.

Lowest owner-occupiers rates on RateCity.com.au

LenderAdvertised rate
1-year fixedGreater Bank1.59%
2-year fixedBeyond Bank1.79%
3-year fixedAustralian Mutual Bank1.98%
4-year fixedBankVic2.39%
5-year-fixedBankVic2.49%
VariableReduce Home Loans1.77%

Source: RateCity.com.auNote Rates are for owner-occupiers paying principal and interest, LVR requirements apply for some loans.

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This article was reviewed by Research Director Sally Tindall before it was published as part of RateCity's Fact Check process.

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