CommBank unveils new home loan rate: Special offer under 5%

CommBank revealed a two-year fixed rate of 4.99% p.a. (7.24% p.a. comparison rate*) on Wednesday morning, making it one of few major lenders offering mortgages below the coveted 5% p.a. mark. 

It comes amid expectations the Reserve Bank of Australia (RBA) board will hold the cash rate steady when it meets in under a fortnight's time.

Owner-occupier home loan holders looking to take advantage of the offer must have a loan-to-value ratio (LVR) of 70% or less (they must hold at least 30% of their property's value as a deposit or equity) and make principal and interest repayments to qualify.

"We regularly review our home loan offerings to ensure we're delivering competitive and flexible solutions for our customers," a CommBank spokesperson said.

The special offer rate is on the table for borrowers new to the bank and existing CommBank variable rate home loan holders who approach the bank's lending term or a mortgage broker.

It's also available as a split rate, meaning a mortgage holder could choose to fix a portion of their loan at 4.99% p.a. while retaining a variable rate on the remainder.

For comparison, CommBank's lowest advertised variable rate is 5.35% p.a. (5.47% p.a. comparison rate*) at the time of writing.

See also: CommBank sweetens lowest mortgage rate with mega Qantas points

On a $500,000 loan over 30 years, a 4.99% rate versus a rate of 5.35% could see a borrower saving more than $110 a month – equating to over $1,300 a year.

Typically, when fixed rates fall below variable rates, it can be a sign lenders expect the cash rate to drop during the fixed term.

But CommBank's economists are somewhat pessimistic about future cash rate cuts.

CommBank cautious on further rate cuts

The nation's biggest lender is forecasting just one more cash rate cut this cycle.

CommBank head of Australian economics Belinda Allen said the bank's view that the economy is recovering has been entrenched in recent weeks.

"The flow of data since the RBA August board meeting has affirmed the economy is moving on to more solid footings," Ms Allen said on Monday.

Australia's central bank has handed down three cuts so far this year, dropping the cash rate from its recent peak of 4.35% to its current level of 3.60%.

The biggest retail bank expects it to remain there when the RBA board meets over 29 and 30 September before dropping once more to 3.35% in November, where it's forecast to plateau.

ANZ aligns with CommBank in tipping the cash rate's trough will come in November.

NAB and Westpac, however, see an additional cut arriving in early 2026, pushing the rate to a low of 3.35%.

CommBank joins growing list of lenders offering rates below 5%

The big four bank's foray into the sub-5% home loan rate race sees it joining peer Westpac, which dropped select two-year fixed rates to as low as 4.89% p.a. (comparison rates* from 5.88% p.a.) late last month.

Meanwhile, the lowest fixed rate on the YourMortgage.com.au database currently stands at 4.65% p.a. (comparison rates* from 5.43% p.a.).

That's offered by P&N Bank and its subsidiary BCU Bank on one-year fixed rate terms for select owner-occupiers.

Variable borrowers tempted by a lower fixed rate should weigh up the longer-term implications.

If the RBA were to cut the cash rate unexpectedly, a fixed rate borrower could end up paying more than if they had stayed on a variable product.

Though, the opposite is also true - if the cash rate rises, fixed rate borrowers will likely be protected.

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