CBA increases 3-year fixed rate – will other majors follow?

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The CBA has raised its 3-year fixed rate for homeowners, a further sign that Australia may soon see the end of ultra-low fixed rates.

Australia’s largest bank increased its 3- and 4-year fixed rates for homeowners paying principal and interest by 0.05%, and increased some loans at interest only 0.10%.

This follows a 0.20% hike by the CBA in March to its 4-year fixed rate. ABC now only has one rate below 2% – set for 2 years.

Modifications to CBA Home Loans for Homeowners Paying Principal and Interest:

Lowest rates Old rate New rate Switch
3 years fixed

2.14%

2.19%

0.05%

4 years fixed

2.19%

2.24%

0.05%

Note: The above rates apply to homeowners paying principal and interest on a fixed price mortgage.

RateCity.com.au database analysis: changes in mortgage rates over the past month.

Lenders who cut Lenders who have worked Current lowest rate
1 year fixed

ten

3

1.67%

2 years fixed

12

3

1.74%

3 years fixed

9

6

1.79%

4 years fixed

1

20

1.95%

5 years fixed

2

17

2.10%

Variable

17

5

1.77%

Source: RateCity.com.au. Note that some lenders have increased and reduced the rates for several home loans.

RateCity.com.au’s research director Sally Tindall said the CBA has become the first major lender to raise its 3-year fixed rate from the bank’s record low.

“Today’s rate hikes may be small, but they indicate a fixed rate market starting to rise,” she said.

“When the CBA raised its four-year rate in March, a wave of lenders followed in its wake. We expect the same to happen with three-year rates in the coming months.

“Banks anticipate an increase in the cost of funding over the next few years, with the next hike in treasury rates expected in 2024, if not sooner, and the end of the RBA term funding facility in a little over. ‘a month.

“The financing, which provides banks with cheap fixed money for three years, has helped lenders deliver record rates to their customers. When the funding is complete, many banks are likely to recalibrate their rates, ”she said.

The Big Four Banks’ Lowest Rates for Homeowner Home Loans

ABC Westpac ANZ NAB
1 year fixed

2.09%

1.99%

2.04%

2.09%

2 years fixed

1.94%

1.79%

2.04%

1.89%

3 years fixed

2.19%

1.88%

2.04%

1.98%

4 years fixed

2.24%

2.19%

2.24%

2.19%

5 years fixed

2.99%

2.49%

2.24%

2.49%

Variable

2.69%

2.19% for 2 years then 2.69%

2.72%

2.69%

Source: RateCity.com.au. Note: Westpac rates are a loan to value ratio of up to 70%. Variable NAB with compensation for loans of $ 750,000 and over.

Lowest rates on RateCity.com.au database

Lender Rate
1 year fixed BCU

1.67%

2 years fixed Homestar Finance

1.74%

3 years fixed Credit Union SA

1.79%

4 years fixed Vic Bank

1.95%

5 years fixed Bank Australia

2.10%

Variable Reduce home loans

1.77%

RateCity.com.au. The rates are for homeowners who pay principal and interest. Certain LVR requirements apply.


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