CBA increases fixed mortgage rates

If Commonwealth Bank customers fix their mortgage interest rate they will be charged up to$116 more in monthly repayments on the average home loan.

The Sun has reported that Commonwealth Bank customers who fixed their loans for four years will feel the full impact, with rates rising 0.6 percentage points to 7.59 per cent.

The banks rate for a mortgage with a redraw option, fixed for one year, rose the least climbing 0.15 points to 5.54 per cent.

Data released by Mortgage Choice has shown that demand for fixed home loans fell 1 percentage point last month to 4 per cent of loan approvals, and that fixed interest rates have become less popular as hopes of locking in low rates diminish.

The ANZ is the only big four bank that has not raised fixed rates in the past 2 weeks but is not ruling it out.

A Commonwealth Bank spokesman said that the rise was due to the rising cost of bank funding.

Commonwealth's rate rises coincide with signs that the housing market continues to grow, with the official statistics released this week showing that house loans were up 0.3 per cent in June.

The amount of the fixed interest rate rise varies depending on the length of time for which the home loan is fixed. Fixing for 15 years now costs the most, with the rate rising 0.25 per cent to 8.44 per cent.

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Published on August 8-th, 2009 in Home Loans
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.
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