September 25, 2023 3:28 pm

Australia’s Largest Bank Surprises Lending Market With Massive Fixed Rate Rises

Facebook
Twitter
LinkedIn
Pinterest
WhatsApp
Telegram

URGENT: JUST 11 DAYS REMAIN TO HELP SAVE INDEPENDENT MEDIA & ANR, TO ENSURE WE ARE FULLY FUNDED FOR NEXT MONTH,SO LET'S CUT THE BS & GET TO THE POINT - WE WILL BE FORCED LAY OFF STAFF & REDUCE OPERATIONS UNLESS WE ARE FULLY FUNDED WITHIN THE NEXT 2 WEEKS - Sadly, less than 0.5% of readers currently donate or subscribe to us But YOU can easily change that. Imagine the impact we'd make if 3 in 10 readers supported us today. To start with we’d remove this annoying banner as we could fight for a full year...

Australia’s Largest Bank Surprises Lending Market With Massive Fixed Rate Rises

By Alfred Bui

Australia’s largest bank has suddenly raised its fixed interest rates for homeowners and investors by a massive 1.4 percent on June 30, a move that has surprised the lending market.

According to an analysis by the financial comparison website RateCity, the Commonwealth Bank of Australia (CBA) lifted its one-year fixed rates for owner-occupiers to 4.99 percent, up 2.90 percent from one year earlier.

Similarly, the bank’s five-year fixed rates soared to 6.69 percent, an increase of 3.7 percent compared to the previous 12 months.

CBA also slashed its lowest variable home loan rates by 0.15 percent, down to 2.79 percent and 2.89 percent for home buyers with a 30 percent deposit and a 20-29.99 percent deposit, respectively.

RateCity research director Sally Tindall said CBA’s fixed-rate hikes were a typical move.

“The bank is responding to the rising cost of fixed-rate funding and a market that refuses to believe the Reserve Bank of Australia will stop hiking the cash rate at around 2.50 percent,” she said.

Tindall also noted that the bank was offering fixed rates lower than two percent less than a year ago. However, the latest changes have pushed CBA’s lowest fixed rate up to under five percent and most of the other rates up to over six percent.

“It’s incredible to see fixed rates move this dramatically in such a short space of time,” she said.

“The sub-two percent fixed rates from 12 months ago now seem like a distant dream.”

Fixed-Rate Loans Account For A Small Percentage of The Market

Regarding CBA’s fixed-rate hikes, Centre for Independent Studies chief economist Peter Tulip told The Epoch Times that the development was not “a huge deal.”

“We have passed through a period in which fixed-rate loans were unusually popular, peaking at 46 percent of housing loans in August 2021,” he said, citing data from the Australia Bureau of Statistics.

“We are now returning to a more normal situation in which fixed-rate loans are a small share of the total.”

In addition, Tulip said that financial markets currently expected variable and fixed interest rates to rise quickly. Therefore, other banks would soon follow the CBA and lift their interest rates as well.

“In terms of implications, large increases in mortgage rates will lead to falls in house prices and a marked slowdown in construction,” he said.

CBA’s changes in fixed interest rates come as economists expected the Reserve Bank of Australia to raise the cash rate by another 0.5 percent to 1.35 percent at the next board meeting on July 5.

Opinion pieces don’t necessarily reflect the position of our news site but of our Opinion writers.

Support the ANR from as little as $8 – it only takes a minute. If you can, please consider supporting us with a regular amount each month. Thank you.

Related News

Subscribe for free to our ANR news emails and access 2 free ebooks plus Reports to share with family and friends about Covid fraud and the danger of the vaccines.

Australian National Review is Australia’s first real free and independent press, one with no editorial control by the elite, but a publication that can generate critical thinkers and critical debate and hold those spreading mistruths and deliberate propaganda in mainstream media to account.

News with a difference that will be educational, compelling and create a platform for political and social change in this country and address the real issues facing this country and the world.

Watch Full Documentary

URGENT: JUST 3 DAYS REMAIN TO HELP SAVE INDEPENDENT MEDIA & ANR, SO LET'S CUT THE BS & GET TO THE POINT - WE WILL BE FORCED TO LAY OFF STAFF & REDUCE OPERATIONS UNLESS WE ARE FULLY FUNDED WITHIN THE NEXT 2 WEEKS

Sadly, less than 0.5% of readers currently donate or subscribe to us But YOU can easily change that. Imagine the impact we'd make if 3 in 10 readers supported us today. To start with we’d remove this annoying banner as we could fight for a full year...

Get access to TruthMed- how to save your family and friends that have been vaxx with vaccine detox, & how the Unvaxxed can prevent spike protein infection from the jabbed.

Free with ANR Subscription from $8

Download the Full PDF - THE COVID-19 FRAUD & WAR ON HUMANITY