Australia's largest home lender launched its digital-only Digi Home Loan with an interest rate of 6.15% p.a. for owner occupier loans with a loan-to-value (LVR) ratio ≤60% (6.28% p.a. comparison rate*).
The rates go up from there to 6.19% p.a. (6.32% comparison rate*) for 70-80% LVR owner occupier loans.
There's nothing inherently suspicious about the offerings but it comes just over a month after CBA-backed digital-only lender Unloan launched its variable home loan for new lending at a more competitive 5.99% p.a. (5.90% comparison rate*).
What is CommBank up to?
The media has speculated Digi Loan is CBA's way of undercutting mortgage brokers by offering borrowers a better rate to sign with the bank directly than brokers are able to access.
It seems several big banks aren't happy with broker cuts from new loans, including upfront and trailing commissions that eat into bank margins.
The Digi Home Loan will be limited to new CommBank customers looking to refinance home loans from other lenders.
The Unloan Variable Home Loan, launched in April, is now open to both refinancers and new mortgages.
Sixteen extra basis points seems a high price to pay for the CBA yellow badge, even if it is via app only, but each to their own.
The new CBA product comes in an otherwise steady week on the mortgage market where a few small lenders lowered their home loan rates.
BCU Bank shaves variable and offset rates
The bank that originally hails from the New South Wales north coast (now a division of P&N Bank) has taken five basis points off its OMG Home Loan variable rate home loan for 60-80% LVR principal and interest (P&I) loans.
It takes the new rate to 6.04% p.a. (6.07% p.a. comparison rate*).
BCU Bank has also adjusted its Offset Home Loan rates, as follows:
| Product | Change (%) | New rate | Comparison rate* |
| Offset Home Loan ≤60% | -0.05 | 6.14% p.a. | 6.17% p.a. |
| Offset Home Loan 60-80% | -0.06 | 6.23% p.a. | 6.23% p.a. |
Offset home loans come with a 100% offset account and an available redraw facility.
Fixed rate drops
Other rates movers this week sent their fixed rates lower after a run of fixed rate rises on the market in recent months.
The Capricornian dropped its Premium Choice 1 Year Fixed rate home loan by 30 basis points to under the 6% mark at 5.99% p.a. (7.34% p.a. comparison rate*).
Premium Choice loans come with a 100% offset account and no ongoing fees.
Meantime, Qudos Bank cut a range of its fixed loans by up to 20 basis points on its four- and five-year fixed rates for owner occupier and investor loans, both P&I and interest only (IO).
Its best new rate is 6.44% p.a. (6.36% p.a. comparison rate*) for LVR 90% owner occupier P&I loans fixed for four years.
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Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.04% p.a. | 6.06% p.a. | $3,011 | Principal & Interest | Variable | $0 | $530 | 90% | 4.6 Star Customer Ratings |
| Promoted | Disclosure | |||||||||
5.99% p.a. | 5.90% p.a. | $2,995 | Principal & Interest | Variable | $0 | $0 | 80% | Apply in minutes |
| Promoted | Disclosure | |||||||||
6.09% p.a. | 6.11% p.a. | $3,027 | Principal & Interest | Variable | $0 | $250 | 60% |
| Promoted | Disclosure | ||||||||||
5.69% p.a. | 6.16% p.a. | $2,899 | Principal & Interest | Fixed | $0 | $530 | 90% |
| Promoted | Disclosure |
Image by Brad Langford on Unsplash
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