The Commonwealth Bank of Australia has announced changes to interest rates across its fixed rate mortgage products.

The bank’s principal and interest three-year fixed rate home loans now start from 3.79 per cent, with investment fixed rate home loans now starting from 3.99 per cent.

For new customers who are on principal and interest repayment terms, the changes below will be effective immediately: 

- three and four-year fixed rates for owner-occupied loans have dropped by 10 basis points
- five-year fixed rate for owner-occupied loans have decreased by 30 basis points
- two, three and five-year fixed rate for investment loans have dropped by 10 basis points

More changes to come

The official cash rate is an important indicator of how lenders will position their interest rates, but it is not an absolute reliable indicator. 

“Where borrowers are concerned, it is no longer reasonable to assume that changes in the cash rate, or lack thereof, will drive home loan interest rates,” Susan Mitchell, chief executive officer at Mortgage Choice, said recently.

“At a standing committee on economics in February, RBA governor [Philip] Lowe highlighted the importance of borrowers seeking a better deal on their home loan, drawing attention to the discounts on headline interest rates that lenders are willing to give borrowers,” she said.

“Interest rates are constantly changing, and the rates you see advertised can be significantly higher than the rate you could secure.”