CBA Ups Interest Only Mortgage Rates

CBA changed their mortgage rates for owner occupied and investor mortgage holders from 7th July. This includes a significant hike for interest only.  They already tightened serviceability requirements a couple of weeks ago.  Principal and Interest Ower Occupied holders get a 3 basis point reduction! All this has, they say, nothing to do with the bank tax.

Commonwealth Bank recognises the importance of ensuring borrowers can sustain a strong path to property ownership and will be reducing our owner-occupier standard variable rate for those repaying principal and interest. From 7 July, customers paying off the home they live in will benefit from a lower standard variable rate of 5.22 per cent per annum, a reduction of three basis points.

Around 80 per cent of owner-occupier customers are repaying principal and interest, and these changes can help these borrowers own their home sooner. A customer with an average mortgage of $350,000 will save $78 a year.

We are supportive of the banking regulator’s moves to manage the level of growth and resiliency in the housing market. To meet our regulatory requirements, variable interest only home loan rates for owner-occupiers and investors will increase by 30 basis points.

Matt Comyn, Group Executive of Retail Banking Services, said: “Paying off your home is important for Australians. For owner occupier customers repaying 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.”

Customers who currently make interest only payments are encouraged, where they are able, to switch to principal and interest repayments. Switching is easy and attracts no fees. Customers can make the change at no cost online, over the phone, or by speaking with a home lending specialist in branch.

These interest only changes are not in response to the bank levy that was announced as part of the Federal Budget in May.

The new rates will be effective from 7 July 2017.

Variable rates Current New from 7 July 2017  
Standard Owner-Occupied Principal and Interest 5.25% pa 5.22% pa -3bps
Standard Owner-Occupied Interest Only 5.47% pa 5.77% pa +30bps
Standard Investor Principal and Interest 5.80% pa 5.80% pa
Standard Investor Interest Only 5.94% pa 6.24% pa +30bps

Home Ownership and Work Redefined

In a new report, CBA says the Australian dream is still alive and well, as new goal posts emerge.

As the quarter acre block is becoming a threatened species and backyards are replaced by patios, just under half of Aussies (48 per cent) believe that the property dream is still alive and well, and for others (52 per cent), the Australian dream is being redefined.

In one of the largest national surveys since the Australian Census, with more than one million responses, the Commonwealth Bank has asked Australians about how they perceive their future, investigating attitudes around the property market, adapting to a changing workforce, and future proofing younger generations.

Partnering with demographer and futurist Claire Madden, the CommBank Connected Future Report examines national, economic and social trends that have emerged from the data.

According to Claire Madden, “The remarkable insights emerging from the CommBank ATM data overall is the resilience and tenacity Aussies have in the face of economic uncertainty. As a lead example, while the Australian property dream looks markedly different in 2017, the majority of Australians either fully own or are paying off their home. This has remained constant over the past five decades, so despite uncertainty, the Australian dream has clearly lived through time.”

The research shows while Millennials (Gen Y) are delaying traditional life markers like getting married or having a child, the average age of a first homebuyer has remained relatively constant over the last two decades, sitting at around 32 years of age.

The research has found that despite rapid digital disruption, increased global connectivity and the emergence of artificial intelligence, resilience seems to be a common trend amongst Australians. Almost half (49 per cent) believe our businesses are ready to face the future and 49 per cent believing our kids have the skills they need for tomorrow.

Key findings from the CommBank Connected Future Report include:

The architecturally designed dream

The Australian ‘dream home’ is no longer a weatherboard standalone house. It is an architecturally designed product, as the quality of dwellings has risen over time. Whilst 74 per cent of those living in cities and 81 per cent of those outside capital cities currently live in a stand alone house, 48 per cent of new residential approvals over the past year have been for medium or high density housing. CommBank data reveals 68 per cent of first home buyers purchased a house in the last year, 16 per cent desire to build their architectural dream home after purchasing vacant land, and 15 per cent purchased an apartment or townhouse.

Living in your state of optimism 

The data relating to the Australian property dream reveals that the state you live in impacts your state of optimism. The least optimistic were people residing in New South Wales (53 per cent) and Victoria (54 per cent), and this was significantly high with younger generations (57 per cent in both states). Those in Queensland (51 per cent), South Australia (53 per cent), Western Australia (54 per cent) and the Northern Territory (57 per cent) believe the dream is more attainable.

The ‘options’ Generation 

Gen Y have prioritised global travel, lifestyle experiences, stayed longer in formal education and attained the name KIPPERS (Kids in Parents’ Pockets Eroding Retirement Savings) for staying in the family home longer. Yet now they are in their prime career building and family forming years, they, like their predecessors, are finding a way to overcome the obstacles, respond to new realities, and see the (re)defined dream come alive. Even though the dream has taken a different form, the data reveals property ownership remains high on the aspirational list (average home buying age remains consistent at 32).

Gen Z and Gen Alpha 

According to the research, rapid digital disruption, increased global connectivity and the emergence of artificial intelligence are converging to reshape the business landscape and the way future generations define work. With high job mobility and the increased casualisation of the workforce, Gen Z (8-22 years old) will have 17 jobs across five careers in their lifetime.

As Gen Z and Gen Alpha (born 2010-2024) complete their schooling and enter the workforce, they will need to be adaptive and agile in order to integrate job roles with rapidly advancing automated systems and handle changing employment markets and organisational structures.

Women leading the way

Women are most optimistic about our kids being skilled up for the future with 52 per cent believing they are future ready, compared with 48 per cent of men. This is particularly evident amongst younger age groups, with the greatest gender gap amongst Gen Ys (25-39 year olds) with a 5 per cent differential between males and females.

Culture and society

With almost 3 in 10 Australians (29 per cent) born overseas1, and a quarter (27 per cent) of the population’s labour force born overseas2, immigration has significantly contributed to Australia’s workforce and economy. In the midst of this diversity, CommBank data reveals that almost half of Aussies (49 per cent) believe that our society truly embraces everyone.

CBA Tightens Mortgage Serviceability Requirements

From Australian Broker.

The Commonwealth Bank of Australia (CBA) has announced a series of changes to its mortgage serviceability criteria and reporting standards.

From 10 June, the bank has changed its serviceability calculations for all new owner occupied/investment home loan or line of credit applications.

For those taking out a new mortgage who already have an existing CBA home loan, line of credit or business loan, the bank will assess the ability to pay through an interest rate buffer of 7.25% p.a. or the current interest rate plus 2.25% p.a. minus any existing rate concessions (whichever is higher).

For customers with an existing owner occupied/investment, line of credit or business loan with an external financial institution, CBA will apply a service loading of 30% to the current repayment amount.

The change brings CBA in line with the other majors.

Amendments have also been made regarding reporting standards with CBA now required to collect the following tax residency information from all customers:

  • The name of all countries where the individual is a tax resident
  • The Tax Identification Number (TIN) for countries other than Australia where the individual is a tax resident or a valid reason for not providing the TIN

These changes came into effect on 9 June and are included in the bank’s home loan on-boarding application form. CBA-accredited brokers can view a webinar that provides an overview of the associated alterations.

Finally, the bank has also released a fact sheet on repayments and customer scenarios to help brokers explain the difference between P&I and IO mortgages and why P&I repayments benefit mortgage holders.

“As Australia’s largest lender, Commonwealth Bank is committed to consistently delivering the best customer experience for home buyers, as well as meeting our responsible lending obligations,” a bank spokesperson told Australian Broker. “As a responsible lender, we constantly review our products and services to ensure we are maintaining our prudent lending standards and meeting our customers’ needs both now and in the future.”

Major bank branch undercutting broker rates

From The Adviser.

The Adviser has learned that CBA could be actively targeting home loan customers that were introduced by brokers with the promise of a better rate should they refinance via a branch.

Despite the bank telling The Adviser earlier this week that it is once again accepting new refinance applications for investment home loans with P&I repayments through broker channels (following a hiatus on new investor refinance applications in February), concerns that some of the major banks are favouring their branch networks over the broker channel are rising.

Adding to the speculation, a source speaking to The Adviser said that he was actively targeted to refinance his home loan during an application for a credit card at a North Sydney branch of the Commonwealth Bank of Australia (CBA).

During the assessment process the source was surprised to hear that the branch could give him a “lower rate than his broker” if he refinanced his home loan directly with CBA.

The loan was originally written by an Aussie broker.

When asked how the branch was able to do this, the representative at the bank told the CBA-customer that he had been told by his manager to refinance broker-originated loans where possible.

The Adviser can confirm that a representative at the Walker Street branch in North Sydney said that they could give a CBA customer a ‘better deal’ than a broker on a refinance loan.

When asked by The Adviser whether CBA is looking to reduce its mortgage flows through the broker channel, a Commonwealth Bank spokesperson said: “Commonwealth Bank is committed to consistently delivering the best customer outcomes for home buyers, and mortgage brokers are an important part of how we meet the home buying needs of customers.”

Proprietary channels a ‘strategic priority’ for CBA

However, the bank has been open in its preference to boost the proprietary channel, telling The Adviser in February that it was a “strategic priority”.

Following the 2017 half year results announcement in February (which showed a 4 per cent drop in broker market share over the six months to December 2016), The Adviser asked CEO Ian Narev whether the bank was moving away from the broker channel.

Mr Narev said that while the broker network “provides a really important proposition that customers like and want” and will be a “critical part of the group strategy”, the “preference” was for customers to go through the proprietary channel.

He said: “[O]ur preference is always going to be, as you can imagine — for all sorts of reasons — to service as many of our customers through our own channels as we possibly can. That’s a strategic priority for us.”

Mr Narev told The Adviser that the increase in loans being written directly through the bank was due to the fact that it had “upgraded and put more lenders in the branches — people who are able to have lending specific conversations with customers”.

He added: “We’ve been able to provide more analytics to support those lenders and others in the branch and we’ve really invested in the branch proposition and as a result of that we’ve seen our own share of the proprietary channel go up at the time when the markets have gone down — so for us that is a pretty good outcome.”

CBA Reveals Impact of The Bank Tax

Commonwealth Bank Chairman, Catherine Livingstone AO, today emailed shareholders outlining the estimated impact of the Federal Government’s recently announced bank levy on the Group. We also had Government confirmation that it will be tax deductible and the impact of this is also shown in the CBA announcement.

Commonwealth Bank today sent the below communication to shareholders outlining the estimated impact of the Federal Government’s recently announced bank levy on the Group.

We have limited information on which to base our calculations, however we estimate that the levy will amount to approximately $315 million per annum, $220 million after tax. This is based on the Group’s current financial position and subject to any further amendments made through the parliamentary process.

The liability base on which the levy is calculated will exclude approximately $240 billion of deposits which are covered by the Financial Claims Scheme, as at 31 March 2017.

Shareholder communication:

Dear shareholder,

The recently announced Federal Budget included a new levy on the five largest financial institutions in the country.

We have expressed serious concerns that the new levy is a poorly designed policy, done without consultation, which impacts not just on the banks but also on our shareholders and customers.

The Commonwealth Bank paid $3.6 billion in tax in the 2016 financial year, making us Australia’s largest taxpayer.

We have limited information on which to base our calculations, but from 1 July 2017, we estimate that the new levy for the Commonwealth Bank will be approximately $315 million per annum ($220 million after tax). This is based on the Group’s current financials and subject to any further amendments made through the parliamentary process.

The budget announcement also included a number of other measures which potentially intrude into the operations of the banks and have significant implications for good corporate governance. For example, the fact that regulators will be empowered to override your Board calls into question the established fundamental governance framework which governs publicly listed companies.

Commonwealth Bank has consistently returned on average 75% of profits as dividends to more than 800,000 shareholders each year. In addition, millions of Australians have also benefitted through their superannuation funds. The remainder of your company’s profits are reinvested for future growth, so that we can serve our customers better, while continuing to deliver for shareholders and the broader Australian economy.

We are deeply concerned the new levy undermines our ability to achieve these goals.

Last Monday, Commonwealth Bank lodged an official submission to Federal Treasury outlining our concerns about the tax. You can read our full submission by clicking here.

Many questions and concerns have been raised regarding this new tax. We will endeavour to respond to as many questions as we can. To stay up to date with our comments, please check our CBA Newsroom site.

Your CEO, Ian Narev, and I would like to hear your views and respond to any questions you may have on the new tax. We therefore intend to hold an interactive telephone “Town Hall” discussion for shareholders in the lead up to our Annual General Meeting in November. Details and invitations will be issued with our full year results in August.

In the meantime, I thank you for taking the time to read about our views on the tax.

$200m+ Refunds Due From Major Financial Advisory Firms – ASIC

ASIC says AMP, ANZ, CBA, NAB and Westpac have so far repaid more than $60 million of an expected $200 million-plus total in refunds and interest for failing to provide general or personal financial advice to customers while charging them ongoing advice fees.

These institutions’ total compensation estimates for these advice delivery failures now stand at more than $204 million, plus interest. As foreshadowed in ASIC’s Report 499 Financial advice: fees for no service (REP499), ASIC can now provide an update on compensation outcomes to date.


In October 2016 the Australian Securities and Investments Commission (ASIC) released REP499. The report covered advice divisions of the big four banks and AMP and described systemic failures to ensure that ongoing advice services were provided to customers who paid fees to receive these services, and the failure of advisers to provide such services. The report also discussed the systemic failure of product issuers to stop charging ongoing advice fees to customers who did not have a financial adviser.

At the time of the publication of the report compensation arising from the fee-for-service failures reported to ASIC was approximately $23.7 million, which had been paid, or agreed to be paid, to more than 27,000 customers.

Since REP 499 a further $37 million has been paid or offered to more than 18,000 customers. In addition, the institutions’ estimates of total required compensation for general and personal advice failures have increased by approximately 15% to more than $204 million, plus interest.

The table provides, at an institution level, compensation payments and estimates that were reported to ASIC as at 21 April 2017. Since that date compensation figures have continued to increase.

Group Compensation paid or offered Estimated future compensation   (excludes interest) Total (estimate, excludes   interest)
AMP $3,816,327 $603,387 $4,419,714
ANZ $43,818,571 $8,613,001 $52,431,572
CBA $5,850,827 $99,786,760 $105,637,587
NAB $4,641,539 $385,844 $5,027,383
Westpac $2,670,479 Not yet available $2,670,479
Total (personal advice   failures) $60,797,743 $109,388,992 $170,186,735
NULIS   Nominees (Australia) Ltd (1) Nil $34,720,614 $34,720,614
Total (personal and general   advice failures) $60,797,743 $144,109,606 $204,907,349

Source: Data is based on estimates provided to ASIC by the institutions and will change as the reviews to determine customer impact continue.

(1) For details, see the section on NAB below.

Key compensation developments


  • AMP’s total compensation estimate decreased from $4.6 million to $4.4 million as AMP reviewed customer files and data to determine compensation required, and revised its previous estimates.


  • The total compensation estimate has increased from $49.7 million to $52.4 million due to the expansion of existing compensation programs and the identification of further failures by authorised representatives of two ANZ-owned advice businesses:
    • Financial Services Partners Pty Ltd; and
    • RI Advice Group Pty Ltd.
  • The largest component of ANZ’s compensation program relates to fees customers were charged for the Prime Access service, where ANZ could not find evidence of a statement of advice or record of advice for each annual review period.
  • In addition, ANZ found that further compensation of approximately $7.5 million is required to be paid to ANZ Prime Access customers for ANZ’s failure to rebate commissions in line with its agreement with customers. This compensation has not been included in the figures in this media release because it does not relate to a failure to provide advice for which customers were charged, but is noted for completeness and transparency.


  • There has been no substantial change in CBA’s compensation estimate, which remains at approximately $105 million, plus interest, the majority of which relates to Commonwealth Financial Planning Ltd (CFPL). The compensation estimate for CFPL results from a customer-focused methodology whereby, as well as providing refunds where the adviser failed to contact the client to provide an annual review, CFPL will provide fee refunds to customers where:
    • the adviser offered the customer an annual review and the customer declined, or
    • the adviser tried to contact the customer to offer a review, but was unable to contact the customer.
  • Some of the other licensees or banks covered by the ASIC fees-for-no-service project have not, at this stage, adopted a similar customer-focused approach to the situation in which a service was offered but not delivered.  ASIC continues to discuss the approach to this situation with these banks and licensees.


  • Since the publication of REP 499, by 21 April 2017, NAB reported to ASIC the further erroneous deduction of adviser service fees for personal advice from more than 3,000 customers of the following licensees:
    • Apogee Financial Planning Ltd: $11,978, from 11 customers;
    • GWM Adviser Services Ltd: $179,446, from 290 customers;
    • MLC Investments Ltd: $9,755, from six customers;
    • National Australia Bank Ltd: $2,777, from seven customers; and
    • NULIS: $173,120, from 3,310 customers.
  • In addition, the table shows the expected compensation of approximately $34.7 million by NAB’s superannuation trustee, NULIS Nominees (Australia) Limited (NULIS), for two breaches involving failures in relation to the provision of general advice services to superannuation members who paid general advice fees (other fees referred to in this release relate to personal advice). As announced by ASIC on 2 February 2017 ASIC has imposed additional licence conditions on NULIS following these and another breach: ASIC MR 17-022. The failure was by MLC Nominees Pty Ltd (and MLC Limited for the first of the two breaches).  Whilst on 1 July 2016 the superannuation assets governed by MLC Nominees were transferred by successor fund transfer to NULIS, and on 3 October 2016 NAB divested 80% of its shareholding in the MLC Limited Life Insurance business, accountability for this remediation activity (including compensation) remains within the NAB Group. The estimate of customer accounts affected has increased from approximately 108,867 to 220,460 since REP 499, reflecting the second of two breaches.


  • REP 499 noted that Westpac had identified a systemic fees-for-no-service issue in relation to one adviser only, with compensation of $1.2 million paid in relation to those failures.
  • Following further ASIC enquiries, Westpac subsequently clarified that it has paid further compensation of approximately $1.4 million to 161 customers of that adviser and 14 further advisers, in respect for fee-for-no-service failures in the period 1 July 2008 to 31 December 2015.

Next steps

ASIC will continue to monitor these compensation programs and will provide another public update by the end of 2017.  In addition ASIC will continue to supervise the institutions’ further reviews to determine whether any additional instances are identified of fees being charged without advice being provided.


Customers who are paying ongoing advice fees for services they do not need can ask for those fees to be switched off. Customers who have paid fees for services they did not receive may be entitled to refunds and compensation, and should lodge a complaint through the bank or licensee’s internal dispute resolution system or the Financial Ombudsman Service.

ASIC’s MoneySmart website has a financial advice toolkit to help customers navigate the financial advice process and understand what they should expect from an adviser. It also has useful information about how to make a complaint.

CBA Dials Back Interest Only Loans

The Commonwealth Bank of Australia (CBA) announced changes to interest only transactions for both new owner occupied and investment home loans. It will honour existing applications submitted for assessment by COB Friday 9 June, but the new rules start on Monday 22nd May.

This reflects a response to the recent regulatory tightening. This is in addition to the interest rates rises already imposed in February, March and April.

Effective from Monday 22 May, the bank will offer the following reduced discounts for new owner occupied and investor home loans with interest only payments:

  • A reduced discount offered through the Home Loan Pricing Tool (HLPT) for new home loan and investment home loans with IO payments
  • The elimination of any discount for those who submit a pricing request for new home loan and investment home loans with P&I repayments who later switch to an IO repayment type

CBA’s $1,250 Refinance Rebate for select interest only owner occupier home loans will also end. This rebate will only be available for owner occupier principal and interest home loans via the HLPT.

The bank has also made further LVR changes which will be effective from Saturday 10 July:

  • Reducing the maximum LVR from 95% to 80% for new owner occupier interest only home loans
  • Reducing the maximum LVR from 90% to 80% for new investment interest only home loans

Changes have also been made to repayment types for building and construction loans. These will be effective from 10 July.

  • CBA will no longer accept IO payments for home loan and investment home loans which are construction or building loans. Instead, the loans must have P&I repayments after construction is complete and the loan has been fully funded
  • CBA will permit construction loan applications submitted for full assessment by COB 9 June with IO payments to proceed to funding

They also remind brokers that repayments on P&I construction loans are interest only until building is completed and the loan is fully funded. At this point, payments switch to P&I. This means the bank will apply the lower P&I reference rate to the interest charged during the construction period.

“In March, the Australian Prudential Regulation Authority (APRA) announced the introduction of a new measure to limit the flow of new Interest Only (IO) residential mortgage lending to 30%. Commonwealth Bank is committed to ensuring we meet our customer’s needs while maintaining our prudent lending standards and meeting our regulatory requirements,” the bank wrote in a statement to brokers.

“To help meet these commitments, we are introducing changes that encourage customers to choose principal and interest repayments, where this meets their needs. We are also increasing our already robust monitoring and reporting activities to ensure that where Interest Only payments are selected, they are suitable for customers’ needs.”

CBA Q317 Trading Update

CBA released their unaudited trading update. Cash earnings were $2.4 billion in the quarter, and statutory net profit was $2.6 billion.

They say net interest income grew (pcp) supported by volume growth in key markets, offsetting margin pressures, but Group Net Interest Margin fell slightly in the quarter due to higher average liquids and competition effects. All the majors have therefore reported a NIM squeeze in this reporting round.

In home lending, growth continued to be underpinned by strong proprietary channel performance but defaults were higher, especially in WA.

Business lending growth overall remained subdued, with strongest growth in Business and Private Banking.

In Wealth Management, Average Assets Under Management and Funds Under Administration rose by 6% and 7% respectively, reflecting stronger investment markets, partly offset by exchange rate movements.

In ASB, volume growth remained strong, with lending up 10% and deposits up 8% (12 months to Mar 17).

Other Banking Income was stable with higher commissions and lending fees offset by lower trading income.

Insurance income was impacted by weather events during the quarter, including Cyclone Debbie.

They continue cost discipline enabling ongoing investment.

Loan Impairment Expense (LIE) was $202 million in the quarter and equated to 11 basis points of Gross Loans and Acceptances, compared to 17 basis points in 1H17.

Corporate LIE was substantially lower in the quarter. Troublesome and impaired assets were slightly lower at$6.7 billion, with broadly stable outcomes across most sectors. Apartment development exposures (Domestic residential apartment developments >$20m) reduced in the quarter.

Consumer arrears increased in line with seasonal expectations and continued to be elevated in Western Australia. In the home lending portfolio, investment lending reduced as a proportion of total new lending in the quarter and they say new interest only lending is being closely managed, consistent with regulatory guidance.

Prudent levels of provisioning were maintained, with Total Provisions at $3.7 billion and no change to overlays for economic conditions.

Funding and liquidity positions remained strong, with customer deposit funding at 67% and the average tenor of the wholesale funding portfolio at 4.2 years.

Liquid assets totalled $143 billion with the Liquidity Coverage Ratio (LCR) standing at 124%. The Group issued $14.6 billion of long term funding in the quarter, and $37 billion year to date.

The Group’s Basel III Common Equity Tier 1 (CET1) APRA ratio was 9.6% as at 31 March 2017. After allowing for the impact of the 2017 interim dividend (which included the issuance of shares in respect of the Dividend Reinvestment Plan), the CET1 (APRA) ratio increased by 37 basis points in the quarter. This was primarily driven by capital generated from earnings, and lower risk weighted assets, partially offset by the maturity of a further $1 billion of Colonial debt8. The Group’s Basel III Internationally Comparable CET1 ratio as at 31 March 2017 was 15.2%.

The Group’s Leverage Ratio was 4.9% on an APRA basis (unchanged from Dec 16) and 5.6% on an internationally comparable basis.

NSW Tops The CBA Rankings in April 2017

The latest CBA “State of the States” report puts NSW at the top of the list and WA last.

NSW has retained its top rankings on business investment, retail trade and dwelling starts. NSW is in second spot on unemployment, construction work and economic growth. NSW is in third spot on housing finance and unemployment.

The ACT has lifted to second spot and is now top-ranked on housing finance. The Territory is second on two indicators and third on another three.

Victoria is in third spot, easing in its relative position on business investment and housing finance. Victoria leads on population growth.

There is little to separate other economies and there have been no changes in rankings.

Tasmania holds its position in fourth spot but there is little to separate it from Queensland, Northern Territory and South Australia. Tasmania is now in second spot for unemployment.

Queensland remains in fifth position on the economic performance rankings. Queensland is benefitting from strong export growth which will boost overall growth of Gross State Product (economic growth). Exports are growing at a 43 per cent annual rate.

The Northern Territory remains in sixth position on the economic performance rankings. The Territory is still ranked first on construction work done and unemployment and is now also top-ranked on economic growth. But on forward-looking indicators like population growth, housing finance and home starts, the Territory lags other

The South Australian economy is in seventh position. South Australia is middle-ranked on business investment and fifth-ranked on dwelling starts.

The economic performance of Western Australia continues to reflect the ending of the mining construction boom. But unemployment has eased over the last three months.

CBA Lifts Mortgage Rates

From Australian Broker.

Commonwealth Bank is increasing home loan fixed interest rates for investment home loans and interest only customers to ensure we continue to meet all regulatory requirements.


Fixed rates for owner occupier customers making principal and interest repayments have not changed.

The following changes will be effective from Friday, 21 April 2017:

  • Fixed rates for owner occupier home loan customers making interest only repayments are increasing by 25 basis points
  • Fixed rates for investment home loan customers making interest only repayments are increasing by 50 basis points for between two to five year terms
  • One year fixed rates for investment home loan customers seeking making interest only repayments are increasing by 25 basis points
  • Two to five year fixed rates for investment home loan customers making principal and interest repayments are increasing by 25 basis points

Home loan customers who already have a fixed rate loan are unaffected by these changes. CBA says it will continue to offer competitive rates across its products, including the equal lowest owner occupier Standard Variable rate among the major banks. Furthermore, home buyers looking to make principal and interest repayments and live in their property will not be affected.

A table of the changes is below:

Fixed Rate Interest Only Owner Occupied Home Loans


Change (p.a)

New rate (p.a)

1 year fixed rate



2 year fixed rate



3 year fixed rate



4 year fixed rate



5 year fixed rate



Fixed Rate Principal & Interest Investment Home Loans


Change (p.a)

New rate (p.a)

2 year fixed rate



3 year fixed rate



4 year fixed rate



5 year fixed rate



Fixed Rate Interest Only Investment Home Loans


Change (p.a)

New rate (p.a)

1 year fixed rate



2 year fixed rate



3 year fixed rate



4 year fixed rate



5 year fixed rate