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Commonwealth Bank reduces home loan interest rates by 0.58%

4 November 2008

 

The Commonwealth Bank today announced that it was reducing its standard variable home loan interest rate by 0.58% pa.  This cut in home loan interest rates follows the Bank’s previous interest rate cut of 0.21% pa, which became effective from 30 October 2008.  The new rates will be effective from Monday 10 November 2008 for new and existing customers.

 

Owner occupied and investment home loan interest rates will decrease as follows:

  Old Rate % pa New Rate % pa Change

Complete Home Loan Variable Rate

8.32% 7.74% -0.58%

Complete Home Loan

Variable Rate (with Wealth Package for loans of $250K or more)

7.62% 7.04% -0.58%

Economiser

(Base Variable Rate)

7.81% 7.23% -0.58%

 

Retail Banking Services Group Executive Ross McEwan said the Bank understands the pressures that interest rates have had on customers.

 

“Unfortunately, as a result of a significant increase in all three elements of our cost of funding over recent weeks, we have not been able to pass on the full amount of this latest decrease in interest rates.”

 

“Raising long term funds remains extremely difficult and expensive.  Similarly, the cost of short term onshore funding has increased in recent weeks and we are also experiencing increased costs in retail deposits.”

 

“While we are not reducing our variable home loan rates by as much as the RBA, we do expect global financial markets to normalise over time and once that does occur we will be able to reduce rates by more than the RBA adjustments. Our customers can continue to expect additional out of cycle interest rate reductions.”

 

“We are committed to remaining competitive in the mortgage market and will continue to find the right balance with our interest rates for our customers and shareholders.”

 

Customers are encouraged to review their financial position and budgeting in light of the changes in interest rates to ensure that their arrangements remain appropriate for their circumstances.    Customers wishing to reduce their repayments to reflect the interest rate reduction or who are seeking some financial advice should contact their branch or our home loan hotline on 13 22 24. 

 

ENDS

Media contact:

Steve Batten

Senior Media Adviser

Commonwealth Bank

Telephone: (02) 9378 2504

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