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Australia's largest bank, Commonwealth Bank of Australia (CBA), announced today that it is raising the rate on its Wealth Package home loan for new customers with substantial deposits.
This move is the bank's fourth rate increase for new customers in the past three months, in addition to the standard hikes by the Reserve Bank of Australia (RBA).
The latest rate adjustment adds 0.1 percentage points to the Wealth Package home loan rate for new customers, leading to a total increase of 0.82 percentage points since March 1, 2023.
Existing customers have experienced a rise of 0.5 percentage points, leaving new customers with an additional 0.32-percentage-point increase.
For owner-occupiers paying principal and interest – contact RateCity for other variations
|
Deposit size |
|
Old rate |
|
New rate |
|
Change % pts |
|
|
40% or more |
|
5.79% |
|
5.89% |
|
+0.1 |
|
|
30% or more |
|
5.89% |
|
5.99% |
|
+0.1 |
|
|
20% or more |
|
5.99% |
|
6.09% |
|
+0.1 |
|
|
10% or more |
|
6.44% |
|
6.44% |
|
No change |
|
|
Less than 10% |
|
7.24% |
|
7.24% |
|
No change |
|
Source: RateCity.com.au. Rates are for owner-occupiers paying principal and interest.
This change from CBA closely follows the recent rate hike by the National Australia Bank (NAB) on its basic variable rate for new customers.
Among the big four banks, there have been a total of 13 occasions where at least one advertised new customer rate has been increased since March 1, 2023, with Westpac having made a single increase.
Note: these hikes are in addition to RBA increases
|
Date |
|
Bank |
|
Loan |
|
Change (in addition to RBA hikes) |
|
|
1-Mar 23 |
|
CBA |
|
Basic variable |
|
up to 0.1% pts |
|
|
1-Mar + 10-Mar 23 |
|
NAB |
|
Basic variable |
|
up to 0.2% pts |
|
|
25-Mar 23 |
|
CBA |
|
Basic variable |
|
up to 0.7% pts |
|
|
28-Mar 23 |
|
|
Basic variable |
|
up to 0.21% pts |
|
|
|
31-Mar 23 |
|
CBA |
|
Package loan |
|
up to 0.2% pts |
|
|
13-Apr 23 |
|
Westpac |
|
Basic variable |
|
0.1% pts |
|
|
14-Apr 23 |
|
CBA |
|
Package loan |
|
up to 0.12% pts |
|
|
21-April 23 |
|
ANZ |
|
Basic variable |
|
up to 0.1% pts |
|
|
28-April 23 |
|
NAB |
|
Basic variable |
|
up to 0.05% pts |
|
|
12-May 23 |
|
CBA |
|
Basic + package |
|
up to 0.1% |
|
|
23-May 23 |
|
NAB |
|
Basic variable |
|
up to 0.1% pts |
|
|
24-May 23 |
|
CBA |
|
Package loan |
|
up to 0.1% pts |
|
Source: RateCity.com.au
|
|
|
With offset |
|
No offset |
|
|
CBA |
|
5.89% + $395 annual fee |
|
5.87% |
|
|
Westpac |
|
6.94% +$395 annual fee |
|
5.49% for 2 yrs then +0.4%pts |
|
|
NAB |
|
7.07% +$8 / mth fee |
|
5.99% |
|
|
ANZ |
|
6.74% +$10 / mth fee |
|
5.79% |
|
Source: RateCity.com.au. Note: rates are for owner-occupiers paying principal and interest. Loan-to-value ratios apply.
Sally Tindall, the research director at RateCity.com.au, expressed concern about the challenging situation faced by new customers seeking loans from Australia's largest bank.
"CBA's lowest advertised rate with an offset has now gone up by 0.82 percentage points in the space of three months,” Tindall said. “That's 0.32 percentage points more than the rate rises customers have been subjected to."
In addition to the rate hike, CBA will also eliminate its $2,000 cashback offer for refinancers in just over a week's time.
The bank attributes the rising cost of funding as the driving factor behind the decision to protect profit margins, even if it means potentially losing out on new business.
"Last year, CBA was aggressively cutting new customer rates and offering cash incentives to encourage customers to switch,” Tindall said. “However, the banks have realized that this strategy has backfired, as the cost of refinancing has become more burdensome than anticipated."
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