CBA Lifts One-Year Fixed Mortgage Rate to 6.89% Ahead of RBA Decision
Commonwealth Bank raised its one-year fixed loan rate by 30 basis points to 6.89%, signaling anticipation of an imminent cash rate hike.
Key points
- CBA raised its one-year fixed mortgage rate to 6.89%, adding $90 monthly to a $450,000 loan.
- All four major banks predict the RBA will lift the cash rate to 4.6% on September 29.
- RBA Governor Bullock’s hawkish testimony on inflation risks prompted banks to accelerate their rate hike forecasts.
Commonwealth Bank increased its one-year fixed home loan rate by 30 basis points this week. The new rate of 6.89% places the product just 11 basis points below the 7% threshold.
This adjustment adds roughly $90 to the monthly repayment on a standard $450,000 mortgage. The move precedes the Reserve Bank of Australia’s widely expected rate hike next Tuesday.
Major banks align on September rate hike
All four major Australian banks now forecast a 25 basis point increase to 4.6%. This would mark the highest official cash rate level recorded since 2011.
CBA and ANZ moved their projected timing forward from November to September. This shift occurred after recent inflation data invalidated earlier narratives suggesting rate hikes had concluded.
Governor testimony drives hawkish policy shift
RBA Governor Michele Bullock’s recent parliamentary testimony provided the primary trigger for this change. She emphasized that persistent inflation risks remain a significant concern for economic stability.
CBA’s chief economist noted that market expectations for a balanced tone were not met. Instead, the central bank’s commentary remained firmly focused on tightening monetary policy further.
Future easing cycle pushed to 2027
The September increase would represent the fourth cash rate rise of the current cycle. This follows recent fixed rate adjustments made by NAB and ANZ last week.
CBA still expects the central bank to resume rate cuts in 2027. However, the timing for this easing phase has been delayed due to current inflation pressures.
