Australia’s largest bank has slashed its variable home rates again – but only for new customers.
Commonwealth Bank has trimmed its basic home loan rate by 0.1 percentage points for owner-occupiers and up to 0.8 percentage points for investors, with its new lowest variable rate now at a competitive 3.69%.
This is the second time CBA has discounted variable rates for new customers since the Reserve Bank began hiking rates in May. The bank also cut its Extra Home loan rates on June 30 by 0.15 percentage points.
RateCity.com.au analysis showed that someone who took out a $500,000 loan three years ago on CBA’s lowest advertised variable rate – and hasn’t haggled since – would now be paying an estimated rate of 4.72%.
CBA has so far cut its lowest variable rate for new customers six times, and unless the existing customer negotiated with their bank each time, they’ve missed out on a total of 1.03 percentage points of rate cuts.
By not getting these additional rate cuts, RateCity.com.au estimated the existing CBA customer has paid up to $5,000 extra in interest over the last three years.
“Complacent variable-rate customers have been whacked with 1.75 percentage points of rate hikes in the last four months. However, anyone willing to refinance is likely to have escaped some of these rises,” said Sally Tindall, RateCity.com.au research director. “The latest ABS statistics show $17.9 billion dollars’ worth of loans were refinanced in July, the second highest level on record. By cutting new customer rates, CBA is doing what it takes to get more of this business.”
Tindall said unless they do something about it, existing customers will not benefit from the discount.
“CBA is not alone in offering up discounts to new business,” she said. “A total of 24 lenders have now cut some variable rates for new customers since the RBA began hiking in May. Don’t bother getting mad with your bank, get even by entering into some hard negotiations or switching to a lender that values your business more.”