- Commonwealth Bank of Australia(CBA) has announced changes to its Fixed rates
- 3 year fixed rates have increased from 2.14% to 2.19%
- 4 year fixed rates have increased from 2.19% to 2.24%
Recent CBA news
It can be seen that ultra-low home loans are starting to be a thing of the past. CBA has begun to inflate their fixed interest rates for the second time since March.
One of the nation’s largest banks has increased both its 3 and 4 year fixed rates for owner-occupiers. The notable changes show an increase of interest rates from 2.14% to 2.19% for 3 years fixed rate and for 2.19% to 2.24% for 4 years fixed rate. With such changes occurring, this has left CBA with only one rate under 2%.
Changes in Fixed Rate Home loans for CBA
|Number of years fixed||Previous rate||Current Rate||Difference|
How CBA’s Rate change might affect the lending market?
With CBA making its move to hike up its 4-year owner-occupier rates since October 2019, it can be relevant to say that the other banks will follow closely in the upcoming months.
RateCity research director Sally Tindall said, “When CBA increased its 4-year rate in March, a flurry of lenders followed in its wake. We expect the same thing will happen with three-year rates in coming months”.
Anyone that fixes their rate for four years today could very well benefit from this in the long run, if variable rates increase soon. Any rate movement is of course correlated to the economy staying on track.
What will the Reserve Bank Do next?
With the record low-interest rates set by the Reserve Bank of Australia, skyrocketing house prices and the recovery rate of unemployment, Economists are closely monitoring the RBA for signs they might increase interest rates a lot earlier than forecasted previously.
“There’s an increasing prospect of interest rates being lifted earlier than 2024 that the RBA has presented in recent statements” – Bankwest Curtin Economics Centre’s Rebecca Cassells.
Curve Security chief executive Andrew Murray advised “If I had a loan I want to fix I would certainly be looking to lock that in for 3 to 4 years. There’s very little risk of it going lower”
As funding provided by the RBA begins to wrap up, many banks are likely to reassess their current rates and adjust to the changing market conditions.
The information in this post is general in nature and should not be considered personal or financial advice. You should always seek professional advice or assistance before making any financial decisions.