Australia’s largest bank has raised its fixed mortgage rates by 1.4 per cent.
The move, carried out by the Commonwealth Bank, comes just days before the next Reserve Bank board meeting.
Fixed mortgage rates will increase for both homeowners and investors.
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RateCity.com.au research director Sally Tindall said the move was “anything but typical.”
“We haven’t seen occasional rises of this size and scale from (the) CBA on our records,” he said.
Australia’s largest bank has raised its fixed mortgage rates by 1.4 per cent. Credit: Getty Images
“The bank is responding to the rising cost of fixed rate financing and a market that refuses to believe that the RBA will stop raising the cash rate by around 2.50 per cent.
“Less than a year ago, CBA still offered a fixed rate below 2 percent. Today the bank’s lowest fixed rate is just under 5 percent, while most are well above 6 percent. .
“It’s amazing to see fixed rates move so dramatically in such a short space of time. Fixed rates below 2% 12 months ago now seem like a distant dream.”
Fixed one-year rates with CBA will be 4.99% below the changes, while five-year rates are now 6.69%.
Tindall added that the other four major banks were expected to follow suit to raise fixed mortgage rates.
“We expect other banks to continue after CBA.
“Westpac and NAB fixed rates are now, in many cases, more than one percentage point lower. It’s only a matter of time before these banks raise fixed rates again. “
Meanwhile, the bank has cut its lowest variable rate home loan by 0.15 percentage points, to 2.79 percent, for customers with a 30 percent deposit.
The RBA will meet Tuesday to discuss whether to raise the cash rate for the third month in a row. Credit: AAP
The CBA’s decision comes just a few weeks after it has raised rates for both new and existing variable customers by 0.5 percent.
The RBA will meet Tuesday to discuss whether to raise the cash rate for the third month in a row.
In May, it raised the interest rate by 25 basis points to 0.35 percent. A month later, the rate rose by 50 basis points to 0.85 percent.
The increase in the cash rate will cost the average homeowner nearly $ 2,000 a year, according to Finder research.
People with a $ 500,000 home loan and the remaining 25 years will see their repayments increase by $ 133 a month.
Those who owe $ 1 million will see their mortgage payment increase by $ 265 a month.
“In recent years it has been seen that a large number of buyers have reached the market, with very low interest rates. No doubt these days are over,” said Finder’s head of consumer research. Graham Cooke.