Australia’s real estate landscape faces another jolt as Commonwealth Bank, the nation’s largest bank, announced an interest rate hike on home loans, making it the last of the Big Four to follow the Reserve Bank of Australia’s Melbourne Cup decision earlier this week. In a move that is set to impact homeowners across the country, Commonwealth Bank revealed that it would increase its variable home loan rates by 0.25 per cent per annum, effective from November 17.
The Reserve Bank of Australia (RBA) raised eyebrows on Melbourne Cup day when it opted to increase the official cash rate, breaking a decade-long trend of keeping rates at historic lows. This decision sent shockwaves through the financial sector, prompting the Big Four banks to reconsider their own interest rates.
Commonwealth Bank’s announcement marks the culmination of this chain reaction, with the other major banks having already adjusted their rates in response to the RBA’s move.
Prior to this increase, Commonwealth Bank’s lowest variable rate for new customers stood at 6.34 per cent. With the 0.25 per cent hike, new and existing homeowners with variable-rate mortgages will experience a notable increase in their repayments.
This decision has sparked concerns among homeowners who are already grappling with the economic challenges posed by the ongoing global situation.
The Big Four banks, including Commonwealth, NAB, Westpac, and ANZ, have all responded to the Reserve Bank of Australia’s decision to raise its cash rate to 4.35 per cent on Tuesday.
Following these adjustments, NAB has emerged with the highest basic variable rate, standing at 6.84 per cent, as reported by RateCity. Meanwhile, CommBank is set at 6.59 per cent, and Westpac offers a rate of 6.34 per cent for the initial two years, with a subsequent increase of 0.4 per cent.
With a rate of 6.44 per cent, ANZ provides the most competitive option. ANZ anticipates that this adjustment will lead to a $70 increase in monthly repayments for owner-occupiers paying principal and interest on a variable home loan of $450,000.
In response to these changes, Angus Sullivan, the retail banking group executive at CommBank, encouraged customers to seek support by messaging the bank through the CommBank app.
“Our top priority is assisting customers who are facing challenges. We encourage customers to reach out to us through the CommBank app at their earliest convenience if they require support,” he said.
“To enhance accessibility, we’ve introduced functionality that allows customers to engage in online chat to explore their options, recognizing that some customers may find this method more comfortable than traditional phone communication.”
