Commonwealth Bank raises interest-only home loan rates
The majors are moving in lock-step as Commonwealth Bank announces rate changes.
Commonwealth Bank has followed Westpac and NAB in announcing that it will increase interest-only home loan rates. The bank said it would lift interest-only rates for both owner occupiers and investors by 30 basis points.
The Australian Prudential Regulation Authority announced earlier this year it would cap banks’ new interest-only lending at 30%. Commonwealth Bank said in a statement that it supported “the banking regulator’s moves to manage the level of growth and resiliency in the housing market”.
The bank also followed its major rivals in dealing a rate cut to principal and interest customers. It trimmed 3 basis points from the standard variable rate for owner occupiers on principal and interest repayments.
“Paying off your home is important for Australians. For owner occupier customers repaying the principal and interest, they can take advantage of the interest rate reduction to pay off their home loan faster. These changes also help us keep the right balance in our home loan portfolio, in line with what our regulators require,” CBA group executive of retail banking services Matt Comyn said.
Commonwealth Bank echoed Westpac and NAB in claiming that the move was unrelated to the Federal Government’s major bank levy.