CommBank slashes lowest variable mortgage rate

The product's lowest rate was cut by six basis points this week, dropping from 5.90% p.a. to 5.84% p.a. (comparison rate 5.97% p.a.) for borrowers with loan-to-value ratios (LVRs) of 60% or less. 

CommBank's Digi Home Loan is available only to those applying directly via CommBank's website, with both purchasers and borrowers refinancing new-to-bank loans eligible.

While the lowest rate is reserved for owner-occupiers with deposits or equity of at least 40%, borrowers with smaller deposits can still access competitive rates under the same product.

The following rates are those currently advertised on the product for both owner-occupiers and investors making principal and interest repayments:

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In the market for a competitive home loan? Here's are some of the lowest rate options available now:

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Lender	Home Loan	Interest Rate	Comparison Rate*	Monthly Repayment	Repayment type	Rate Type	Offset	Redraw	Ongoing Fees	Upfront Fees	Max LVR	Lump Sum Repayment	Extra Repayments	Split Loan Option	Tags	Row Tags	Features	Link	Compare	Promoted Product	Disclosure
loans.com.au	loans.com.au Variable Home Loan P&I <90%	5.79% p.a.	5.83% p.a.	$2,931	Principal & Interest	Variable			$0	$530	90%					Owner Occupier Variable Principal & Interest 10% Min Deposit Redraw Extra Repayments More details	Available for purchase or refinance, min10% deposit needed to qualify. No application, ongoing monthly or annual fees. Dedicated loan specialist throughout the loan application.	More details	Compare	Promoted	Disclosure
Ubank (part of NAB)	Ubank (part of NAB) Neat home loan - max. 60% LVR (Owner occupied, Principal and interest)	5.84% p.a.	5.86% p.a.	$2,947	Principal & Interest	Variable			$0	$250	60%					Owner Occupier Variable Principal & Interest 40% Min Deposit Redraw More details	Easy application. Fast approval. No annual fee. Unlimited additional repayments free of charge. Redraw freely - Access your additional payments.	More details	Compare	Promoted	Disclosure
Unloan	Unloan Variable Rate Home Loan LVR < 80%	5.74% p.a.	5.65% p.a.	$2,915	Principal & Interest	Variable			$0	$0	80%					Built and funded by CommBank Owner Occupier Variable Principal & Interest 20% Min Deposit Redraw More details	A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.	More details	Compare		Disclosure

How does CommBank's digital-only home loan stack up?

CommBank's latest cut sees its online-only product advertising similar rates as the digital home loan offerings of Westpac and ANZ.

Though, both Westpac and ANZ only advertise digital-only mortgages to direct-to-bank applicants refinancing existing loans, with purchasers deemed ineligible.

Here's how the lowest rates offered from each of Australia's big four banks stack up:

CommBank's Digi Home Loan will soon celebrate its first birthday, having been launched in May 2024.

Borrowers turning to the product will face a $300 establishment fee and a $10 monthly service fee, though this could be negated with a $10 monthly cashback if Yello Homeowner eligibility is met.

It can also come with a linked offset account for an extra $10 per month.

CommBank cuts amid expectations of RBA rate drop

CommBank's rate cut comes as its economics team maintains its forecast that the Reserve Bank of Australia (RBA) will cut the cash rate by 25 basis points later this month.

While the Labor party's re-election didn't alter that outlook, the bank did revise down its GDP forecast.

"We have not made changes to our economic forecasts or RBA call as a result of the Labor party retaining Government," CommBank head of Australian economics Gareth Aird said on Thursday.

"Monetary policy is restrictive and the case to continue to normalise the cash rate is sound.

"But we still expect the RBA to take a gradual approach in normalising the cash rate given underlying inflation is essentially tracking in line with its forecasts."

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