Commonwealth Bank’s Bankwest division cuts home loan interests rates 0.1 per cent


A subsidiary of Australia’s biggest bank has delivered a surprise gift to prospective homeowners just two weeks before Christmas.

Bankwest, a part of Commonwealth Bank, announced this week it would reduce its variable rates on new home loans for owner-occupiers and investors by 0.1 per cent, effective from Friday.

The decrease comes as ING, the $80bn Dutch behemoth with operations in Australia, lifts its variable rates for some of its owner-occupier and investor products by 0.05 per cent.

The increase marks ING’s second hike within weeks following its 0.25 per cent bump for new and existing customers after the Reserve Bank of Australia’s Melbourne Cup Day cash rate increase on November 7.

Bankwest now offers prospective homeowners a 6.29 per cent variable rate on loan-to-value ratios of 60 per cent or less, while ING offers 6.19 per cent.

For LVRs up to 80 per cent, Bankwest offers a 6.34 per cent rate, while ING offers 6.19 per cent.

CBM Mortgages director Craig McDonald said Bankwest was moving to capture more of the new homeowner market and align its products more closely with competitors.

“It looks like it’s just Bankwest trying to capture a bit more of the market or they are seeing their current offering is greater than the other lenders,” he said.

“If they are 6.29, and ING are 6.19, although 0.1 isn’t much of a difference, 0.2 does start to make a difference and that is how far outside the market they were.”

Mr McDonald said banks had shifted rates in the past few months to rebalance their position in the market.

“Over the past few months there have been many banks changing what their base rate is outside of the RBA changes,” he said.

“It is just banks changing their position in the market.

“It’s really comparing their position to their competitors’ position.”

All of Australia’s big four banks – Commonwealth, NAB, Westpac and ANZ – passed on the RBA’s November decision to hike the cash rate to 4.35 per cent.

The cash rate serves as a benchmark for interest rates in the economy, with banks typically quick to raise mortgage rates as a result.

The RBA has moved sharply to tame a surge in inflation following supply shocks from the Covid shutdown and the breakout of war in Ukraine.

It raised the cash rate from 0.1 per cent in April 2022 to 4.1 per cent in June 2023, and in November, RBA governor Michelle Bullock announced a 25 basis point hike to 4.35 per cent.

At its December meeting, the RBA maintained the rate at 4.35 per cent, with Ms Bullock saying inflation had continued “to moderate”.

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