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A major bank has moved to reduce interest rates on its business and home loans following the Reserve Bank’s historic move on Tuesday.
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Major bank cuts rate on business, home loans
04 November 2020
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The Commonwealth Bank has moved to reduce business loans interest rates through the government’s SME loan guarantee scheme by up to 51 basis points, with secured loans now at 2.99 per cent and unsecured loans at 3.99 per cent.
Its fixed rate fully secured BetterBusiness loan for new three- to five-year loans will also be reduced by 50 basis points to 2.49 per cent.
CBA is the first major bank to reduce its interest rates following the RBA’s decision to cut the cash rate from 0.25 of a percentage point to a record low of 0.1 of a percentage point.
RBA governor Philip Lowe also signalled that the board did not expect to increase the cash rate for at least three years.
“As we have said the whole way through this pandemic, we have a vital role to play in helping Australian businesses through the range of challenges they are facing,” said CBA business banking group executive Mike Vacy Lyle.
“We know our customers want certainty, and the cuts we have announced today will help provide some certainty in the form of highly competitive interest rates for terms of three to five years.
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“Coupled with the wide range of support measures we have rolled out over the last eight months, we’re confident these offers will help many small businesses get through this challenge and back on the road to recovery and growth.”
The new rates will take effect from 11 November.
CBA will also move to reduce new four-year fixed rates for owner-occupiers by 100 basis points to 1.99 per cent — its lowest ever advertised home loan rate.
The bank will also reduce new two and three-year fixed rate home loans for owner-occupiers to 2.14 per cent.
CBA also confirmed a moratorium on forced home sales until September 2021 for customers who are unable to recommence repayments due to the pandemic.
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