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CBA to hike fixed and new customer variable rates next week – why this could be a game changer

Eden Radford avatar
Eden Radford
- 4 min read
CBA to hike fixed and new customer variable rates next week – why this could be a game changer

Australia’s biggest home loan lender, CBA, has today announced it will be increasing the rates on select variable and fixed rates, effective this Tuesday (18 July).

The variable rate increases of up to 0.07 percentage points are only for new customers taking out an Extra Home Loan. Existing customers on a variable rate are not impacted.

Fixed rates will rise by up to 0.40 percentage points for both new customers and existing ones switching to a fixed rate from Tuesday.

Typically, the bank increases fixed rates without advance communication. However, in a new approach, the bank has provided two business days’ notice of this change, giving customers and their brokers an opportunity to lock in the old rate by paying a rate lock fee of $750.

New customer applications for the Extra Variable Home Loan that are successfully submitted before Tuesday will also be eligible for the old discount.

CBA Variable rate changes on Extra home loan – new customers only

For owner-occupiers paying principal and interest

Old rateNew rateChange % pts
LVR <=60%6.24%6.29%0.05%
LVR 60.01-70%6.32%6.39%0.07%
LVR 70.01-80%6.44%6.49%0.05%
LVR 80.01-90%6.89%6.89%No Change
LVR 90.01-95%7.59%7.59%No Change

Source: RateCity.com.au. Effective 18 July 2023.

CBA fixed rate changes

For owner-occupiers paying principal and interest

Rate typeOld RateNew rateChange
1-yr6.49%6.74%0.25%
2-yr6.54%6.84%0.30%
3-yr6.34%6.64%0.30%
4-yr6.29%6.69%0.40%
5-yr6.29%6.69%0.40%

Source: RateCity.com.au. Rates are for customers taking out a package loan which includes a $395 annual fee. Effective 18 July 2023.

CBA not the only big four bank to increase rates this week

CBA’s hikes come off the back of a busy week of rate hikes with over 20 lenders changing at least one fixed rate. On Tuesday 11 July, ANZ and Macquarie Bank increased their fixed rates across all terms, while BOQ and Suncorp increased fixed rates today.

Lenders that have changed at least one fixed rate in the last month

Rate typeLenders that have cutLenders that have hiked
1-year fixed878
2-year fixed1177
3-year fixed1266
4-year fixed731
5-year-fixed1037

Source: RateCity.com.au. Note some lenders have changed more than one fixed rate.

RateCity.com.au research director, Sally Tindall, said: “The rate hikes have been flooding in all week, as banks shift their fixed rate prices up a notch.”

“With fixing still very much on the nose among Australians, many banks just aren’t interested in posting competitive offers,” she said.

“Australia’s biggest bank is also set to hike its new customer variable rates on its basic variable home loan for the fifth time in almost five months.“As a result, a new customer taking out the lowest variable rate on CBA’s Extra Home Loan will be paying 0.42 percentage points more than someone who took out the exact same mortgage in February of this year.

“In an interesting move from Australia’s biggest bank, CBA has provided a heads up on next week’s changes, giving customers and their brokers a chance to lock in the old rate before it rises.

“This is a potential game changer for customers considering a fixed rate and mulling over whether they want to shell out for a rate lock fee. If the bank continues to give advance warning of their fixed rate moved, customers won’t need to shell out for the $750 rate lock fee until they know a change is coming,” she said.

Big four banks’ lowest advertised fixed rates

Fixed termCBAWestpacNABANZ
1-yr6.74%6.19%6.24%6.54%
2-yr6.84%5.99%6.14%6.54%
3-yr6.64%6.39%5.99%6.39%
4-yr6.69%6.39%6.09%6.49%
5-yr6.69%6.69%6.19%6.59%

Source: RateCity.com.au. Rates are for owner-occupiers paying principal and interest. LVR requirements apply. CBA rates effective 18 July.

Lowest fixed rates on RateCity.com.au

Fixed termLenderRate
1-yrIllawarra Credit Union5.40%
2-yrAustralian Mutual Bank5.23%
3-yrAustralian Mutual Bank5.33%
4-yrQudos Bank5.59%
5-yrRACQ5.34%

Source: RateCity.com.au. Rates are for owner-occupiers paying principal and interest. LVR requirements apply. Australian Mutual’s rate is for first home buyers only.

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Product database updated 16 Jun, 2024

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