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Commonwealth Bank has slashed its mortgage rates stoking competition in lending market

26 September 2019

Commonwealth Bank has stoked the fire of competition among the big banks by slashing its fixed interest rates by up to 90 basis points across its mortgage products.

Mortgage brokers say the move indicates the CBA thinks the Reserve Bank will again cut interest rates when it meets next week.

Other major banks have been lifting lending requirements and offering cash incentives to high quality borrowers in response to the increasing market competition.

Economists now widely expect the RBA to cut rates again next week, after their last double move in June and July this year.

At the Commonwealth Bank they are cutting owner-occupier and investor rates form 1-5 years from 10 to 90 basis points.

Owner-occupier principal-and-interest one-year rates have been cut 60 basis points to an attractive 3.29 per cent.

The equivalent four-year rate has also been cut 60 basis points, down to 3.49 per cent.

Owner-occupier interest-only loans have also been cut by 10 to 90 basis points, taking their five-year rate to 3.99 per cent.

Investment principal-and-interest loans have also been cut, but between 20 and 90 basis points, with the four-year rate now down to 3.99 per cent.

Westpac, and its subsidiaries St George, Bank of Melbourne and BankSA, have also all made significant cuts to their interest rates over the last couple of months.

Competition for market share among the big four banks is clearly heating up ahead of what appears to be an imminent cut to the official cash rate from the RBA next week.

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