Changes to Interest Rates on Home Loan Products and Viridian Line of Credit
Tuesday 27 June 2017
Commonwealth Bank has today announced changes to its Variable Home Loan interest rates and Viridian Line of Credit products effective Friday 7 July 2017:
- Principal and Interest (P&I) interest rates will decrease by 0.03% per annum for Owner Occupied Home Loans. The new P&I Standard Variable Rate for Owner Occupiers will be 5.22% per annum.
- P&I interest rates for the Extra 2 Year Introductory Rate and Life of Loan product will decrease by 0.10% per annum for Owner Occupied Home Loans, and by 0.30% per annum for Investment Home Loans.
- The Extra 2 Year Introductory Rate for Owner Occupiers will be 3.92% per annum, and 4.32% per annum for Investors.
- Interest Only (IO) Variable Owner Occupied and Investment Loan Interest Rates will increase by 0.30% per annum.
- The new IO Standard Variable Rate for Owner Occupiers will be 5.77% per annum and 6.24% per annum for Investors.
- Viridian Line of Credit rates will increase by 0.30% per annum to 6.38% per annum.
- P&I interest rates for Standard Variable Rate Investment Home Loans remain unchanged
- Fixed rates and Equity Unlock for Seniors rates remain unchanged.
Frequently Asked Questions
Why is Commonwealth Bank decreasing P&I Variable Home Loan interest rates?
- Commonwealth Bank recognises the importance of ensuring borrowers can sustain a strong path to property ownership and will reduce standard variable rates for those Owner Occupiers making P&I repayments. From Friday 7 July 2017, customers paying off the home they live in will benefit from a lower Standard Variable Rate of 5.22% p.a.
- Around 80% of our Owner Occupier customers are making P&I repayments and these changes can help them own their home sooner.
- A customer with an average mortgage of $350,000 will save $78 a year.
- We know that paying off their home is important for Australians. Making P&I repayments helps them to do this by paying down the principal, and building property equity, from day one.
- We have announced additional reductions to the Extra Home Loan 2 Year Introductory Rate and Life of Loan product to support customers who are seeking affordable repayment options while paying down the principal and interest on their home.
- The Extra Home Loan is our low rate, low fee product for those customers who want a simple and easy home loan. The Extra Home Loan 2 Year Introductory Rate helps our customers save money through these features:
- A special discounted rate for the 2 year introductory period and a discounted rate for the remainder of the loan term; and
- No monthly loan service fees
Why is Commonwealth Bank increasing interest rates for IO Variable Home Loans?
- We are supportive of the regulator’s moves to manage the level of growth and resiliency in the housing market.
- We are increasing these rates to continue to meet our regulatory requirements, and maintain the right balance in our home loan portfolio.
- We encourage customers to choose P&I repayments where this best suits their needs.
- Choosing P&I repayments means that you pay down the principal as well as the interest from day one, resulting in lower average repayments over the life of the loan and building property equity.
Will my repayments change after Commonwealth Bank’s decision to change Variable Home Loan interest rates?
- For customers making IO payments, we automatically adjust loan repayments each month to ensure customers cover the amount of interest charged.
- We will not automatically reduce repayments for customers making P&I repayments. To reduce your repayments, contact 13 2224 between 8:00am and 8:00pm AEST, visit your nearest branch, or complete a Change my loan repayment request in NetBank.
How can I change my repayments to P&I if IO payments no longer suit my needs?
- You can make changes to your repayments by completing a Change my loan repayment request in NetBank via Settings > Payment settings > Home loan repayments.
- You can also contact us on 13 2224 between 8:00am and 8:00pm AEST, or visit your nearest branch.
I am unsure if my home loan product remains appropriate for my needs.
- If you are unsure if your home loan product remains the most appropriate for your needs, you can speak with one of our Home Lending Specialists who can conduct a Financial Health Check and assess the product(s) and options that may best suit your needs. To do this, please visit one of our branches or call us on 13 2224.
I would like more information. Who can I speak to?
- If you would like us to conduct a Financial Health Check to ensure we are supporting you to achieve your financial goals you can visit any Commonwealth Bank branch or call us on 13 2224 for more information.
- Refer to our Home Loan Interest Rates website, which we update regularly to reflect current interest rates. We will update the website on Friday 7 July 2017 to reflect these changes.