CBA drops fixed loan rates
The Commonwealth Bank has cut its five-year fixed-rate home loan rate by 0.2 per cent to 6.39 per cent, its lowest level in 10 years. The four-year fixed rate has been cut to 6.29 per cent and the two and three-year fixed rates to 6.09 per cent, effective from February 20.
The CBA is also offering introductory rates from 5.25 per cent as well as a $600 establishment-fee saving on both introductory rates and three-year fixed rate loans over $80,000.
But Infochoice's CEO Lisa Montgomery said consumers should be wary of switching, as fixed rates don't suit everyone. They're a lot less flexible than variable loans and often don't permit extra payments. She said it can also be more expensive to exit or break off a fixed-rate loan than a variable-rate loan. Banks don't throw out a rate like this as a gift, Ms Montgomery said, someone always loses.