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CBA first big bank to cut rates

CBA first big bank to cut rates

02 Oct, 2019 - 2 min read

CBA is the first major bank off the blocks, cutting variable rates by 0.13 per cent for owner-occupiers paying principal and interest.

CBA has passed on the full 0.25 per cent cut to investors paying interest only. The rate cuts take effect on 22^nd October and are for new and existing customers.

The move brings CBA’s lowest variable rate down to 3.22 per cent, making it the lowest of all the big banks at this stage.

For the average existing CBA customer on the lowest rate, this translates to a saving of $29 per month, or $343 per year.

Paul Marshall, chief executive at RateCity.com.au, said: “CBA’s variable home loan customers will be disappointed by the banks’ decision not pass on a bigger cut.”

“As a result, the average CBA home loan customer, on the lowest rate will miss out on $26 per month, or $314 per year.

“The banks are between a rock and a hard place when it comes to passing on rate cuts, because it is a balancing act to satisfy their borrowers, savers and shareholders as rates dip closer to zero.”

Impact of 0.13% C BA rate cut
CBA	Old rate	New rate	Savings per month	Missed savings per month	Savings per year	Missed savings per year
Standard Variable Rate	4.93%	4.80%	$31	$29	$379	$347
Discounted Variable Rate	4.43%	4.30%	$31	$28	$368	$337
Lowest variable rate	3.35%	3.22%	$29	$26	$343	$314

Source: RateCity.com.au

Note: The rates are for owner-occupiers paying principal and interest on a $400,000 loan. Missed savings are calculated based on what a customer would have saved if CBA had passed on the full rate cut of 0.25 per cent.

Who’s moved?

LIVE UPDATES: https://www.ratecity.com.au/rba-cash-rate

Disclaimer

This article is over two years old, last updated on October 2, 2019. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.

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This article was reviewed by Senior Finance Writer Liz Seatter before it was published as part of RateCity's Fact Check process.

Laine Gordon

Head of Public Relations

Laine Gordon is the Head of Public Relations at RateCity and an experienced journalist and research specialist. With a background in news and feature writing, covering finance, media and even food (a passion of hers) at Reed Elsevier publications, Laine brings almost two decades of experience to the team. Having covered major areas of interest to the general public from hip pocket issues to rising and falling interest rates and the impact to mortgages, credit and saving in Australia, she is passionate about researching and telling people’s stories to help others make better decisions about their own finances.