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CBA first big bank to cut rates

CBA first big bank to cut rates

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 22nd 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

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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.

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