CBA drops fixed home loan rate to 2.29%
Commonwealth Bank has cut its fixed-rate home loans to record-low levels but says it won't pass on any of the Reserve Bank of Australia's cash rate cut to its variable rate customers.
CBA cut its one-, two- and three-year fixed home loan rates by 70 basis points to 2.29 per cent, while making no changes to its standard variable rate home loans.
The changes will save the average customer $400 a month and release up to $3.6 billion in cash for Australian households, CBA said.
"These are unprecedented times, and they call for unprecedented measures," Commonwealth Bank chief executive Matt Comyn said.
The Reserve Bank earlier cut the interest rate to a record-low 0.25 per cent as part of a suite of economic support to cushion the blow of the coronavirus pandemic.
CBA said it would also cut rates on cash-linked small business loans and increase rates on 12-month term deposits to 1.7 per cent.
Sally Tindall, research director at RateCity.com.au, said CBA's announcement was "a win for small business borrowers who are struggling to make ends meet and keep their businesses afloat" but would frustrate home loan customers looking to stay on a variable rate mortgage.
"Banks are between a rock and a hard place when it comes to passing on rate cuts to their mortgage holders, particularly as many savings rates are already so close to zero," she said.
The other major banks have yet to respond to the RBA's decision.
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