CBA slashes fixed mortgage rates

CBA slashes fixed mortgage rates

CBA‘s general manager of home loans, Clive van Horen, said signs of economic weakness in recent weeks - including the unemployment rate hitting a 12-year high of 6. 4 per cent - had led to a decline in the swap rate that determines fixed borrowing costs. “The unemployment numbers that came out in Australia a few days back, that impacted the swap rate, so funding costs have dropped,” he said.

After cutting five-year fixed rates to a record low last month, the country’s biggest bank has cut its key three-year rate by 15 basis points to 4. 94 per cent, equalling NAB and ANZ.

While the Reserve Bank has not moved the cash rate in a year, it says the actual rates paid by households have continued to fall in recent months due to lower fixed rates and larger discounts by banks.

Since CBA slashed its five-year loan last month, Mr van Horen said the share of new mortgage customers taking out a fixed rate loan had increased from 13 per cent to 20 per cent.

Canstar analyst Mitchell Watson said that since late last month the CBA three-year term deposit rate had fallen by 35 basis points to 3. 6 per cent and its four-year term deposit rate was down 30 basis points to 3. 8 per cent.

Read more here: SMH


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