Commonwealth Bank (CBA) has slashed its package home loan rates for new customers, as Aussies brace for another interest rate rise in December.
The major bank lowered the advertised rate on its Wealth Package home loan by up to 2.03 per cent for new customers with bigger deposits.
The rate is now 4.57 per cent for customers with a 40 per cent deposit (60 per cent loan-to-value ratio (LVR)), and existing customers looking to increase their home loan amount.
Also read: RBA slashes homebuyer budgets by $195,500
RateCity.com.au research director Sally Tindall said the discounts would help the bank shore up its loan book with “rock solid borrowers” who could withstand rising interest rates.
“Owner-occupiers with a decent amount of equity up their sleeve are a hot commodity in an uncertain market, where rates continue to rise and property prices are on the fast train south,” Tindall said.
Customers with smaller deposits can also receive a discount, with CBA cutting rates by 1.36 per cent for home buyers with a 10-20 per cent deposit, and 0.36 per cent for those with a 5-10 per cent deposit.
Many of the bank’s advertised packaged rates were now cheaper than its no-frills options, RateCity said. Package home loans often include an offset account, but typically have higher rates and fees than a bank’s basic, no-frills option.
According to RateCity, the bank is also offering the cheapest advertised home loan rate out of the Big Four banks, for home loans with an offset account.
Westpac currently advertises a 5.94 per cent rate for borrowers with 70 per cent LVR, while ANZ has a 5.74 per cent loan for borrowers with 80 per cent LVR. NAB has a 6.37 per cent rate for loans $750,000 and over.
Time to ask for a better rate
Although these rates were aimed at new customers, Tindall said existing customers could also use this opportunity to ask for a better deal.
“If you’ve got a loan with CBA, now’s the time to do a reality check on your rate. If it's higher than what your bank is offering new customers, ask the bank to match it,” she said.
“If you’ve made significant headway into your loan, you should be able to reap the rewards too.”