Commonwealth Bank follows Westpac’s lead and lifts variable home loan rates
- Commonwealth Bank announced increase to variable home loans by 0.15%
- CBA customers can expect to pay extra $28 per month for $300,000 mortgage
- Other lenders expected to follow and lift rates
October 23, 2015, Sydney – Comments by Michelle Hutchison, Money Expert at one of Australia's biggest comparison websites finder.com.au:
"Yesterday's announcement to lift variable home loan interest rates by the Commonwealth Bank came as no surprise, as it follows Westpac's announcement earlier this month (October 14, 2015) to lift its variable home loan interest rates by 0.20 percentage points.
"Commonwealth Bank announced it will increase its standard variable home loan rate by 0.15 percentage points, effective November 20, 2015, the same day as Westpac’s 0.20 percentage point rate rise. According to finder.com.au, this will cost a mortgage holder with a $300,000 home loan an extra $28 per month, $339 per year, or potentially $10,177 over the life of a 30-year loan.
"Commonwealth Bank is the biggest home loan lender in Australia, with over $239 billion of home loans financed to households across the country (according to the latest APRA data). This increase will potentially be an extra $22.5 million per month, over $270.5 million in 12 months or over $8.1 billion over 30 years.
“However, despite Commonwealth Bank’s bigger household mortgage book, Westpac’s higher standard variable rate and larger rate increase means it’s expected to make a bigger return on the latest rate rise than Commonwealth Bank.
“In fact, according to finder.com.au, Westpac is likely to make an extra $23.9 million per month, $287.3 million in 12 months or potentially over $8.6 billion over 30 years – that’s $1.4 million more than Commonwealth Bank per month or $505.2 million more over 30 years.
"It's likely that the other two major banks – ANZ and NAB – as well as other lenders will increase their variable home loan rates out of cycle. So it’s important for borrowers to watch their rates and compare their home loan to other lenders in the market.”
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The information in this release is accurate as of the date published, but rates, fees and other product features may have changed. Please see updated product information on finder.com.au's review pages for the current correct values.
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