Commonwealth Bank has responded to the Reserve Bank of Australia’s (RBA) cash rate decision by reducing interest rates for home owners and small business while increasing term deposit rates.
The major bank's standard variable rate (SVR) mortgages will reduce by 0.13 per cent, taking the rate for owner occupiers to a record low 5.22 per cent. The SVR for investor loans will fall to 5.49 per cent. While this decrease delivers benefits to mortgage holders, Commonwealth Bank will also support savers by increasing the return on several products, some by as much as 0.55 per cent.
“While the circumstances of each RBA rate decision will always vary, we’ve carefully considered the current environment and the needs of both borrowers and savers,” said Matt Comyn, CBA's group executive retail banking services.
“Today we’ve reduced our mortgage rates to a record low while increasing term deposit rates to provide an opportunity to the millions of Australians who rely on savings," he said.
To meet the needs of savers, Commonwealth Bank will increase one, two and three year term deposits with all rates set to rise to 3.0 per cent or greater.
“Given increased funding costs and capital requirements, today’s announced changes seek to balance the needs of both customers and shareholders,” Mr Comyn said.
Business customers with variable rate products will also benefit from a 0.13 per cent rate reduction.