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CBA hikes variable rates by 0.25%, stays ‘mum’ on savers
Australia’s biggest bank has tonight announced it will pass on the cash rate hike in full to its variable rate mortgage customers, effective 20 May 2022.
CBA variable rates for owner-occupiers paying principal and interest
| Old rate | New rate | Increase in repayments, $500K | |
| Standard variable | 4.55% | 4.80% | $72 |
| Discounted variable | 3.85% | 4.10% | $69 |
| Lowest variable | 2.19% | 2.44% | $62 |
Source: RateCity.com.au. Repayments are for an owner-occupier paying principal and interest with a $500,000 loan over 25 years. An LVR of 70% applies to CBA’s lowest variable rate.
In a worrying sign, the bank has not indicated what it will pass on to its millions of savings customers, saying they are “under review”.
At this stage, Westpac, NAB and ANZ have not indicated how they will respond to today’s historic cash rate hike.
RateCity.com.au research director, Sally Tindall, said: “CBA is the first cab off the rank, matching the RBA’s cash rate hike of 0.25 percentage points for variable borrowers.”
“It’s now just a matter for time before the other big banks follow, and it’s likely they’ll also hike rates by the full 0.25 percentage points,” she said.
“Many of the bank’s customers will be disappointed at these hikes, particularly in light of the fact CBA did not pass on the last two RBA cash rate cuts back in 2020.
“What we don’t know is what CBA plans to do for its savers and that’s a worrying sign. It could signal the bank may not pass on this hike in full to its millions of savings customers.
“For the last decade, savers have watched their interest rates crumble away to nothing. CBA should do the right thing and pass this hike on to these customers.
“Competition is still strong in the variable rate market, with Homestar Finance today deciding to keep its lowest rate for new customers of 1.79 per cent unchanged. Reduce Home Loans has also said it will keep at least one variable rate under 2 per cent.
“It is possible more lenders will decide to keep their new customer rates under 2 per cent, to bring in new business,” she said.
Find out who has moved at RateCity.com.au’s RBA rate tracker
Disclaimer
This article is over two years old, last updated on May 3, 2022. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.
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