January 17: CommBank Hikes Fixed Home Loans as RBA February Risk Builds
CommBank fixed rates jumped by up to 70 bps as more than 30 lenders reprice ahead of a possible RBA rate hike in early February. The move signals higher funding costs and tighter lending conditions, with markets dialling back rate‑cut hopes. For Australians, this shift affects fixed home loan rates, monthly budgets, and property activity. We explain what changed, why it happened now, and how borrowers can respond with clear, practical steps to protect cash flow and make better loan choices.
Why the sudden shift in fixed home loan pricing
Commonwealth Bank lifted fixed offers by as much as 0.70 percentage points, joining a broad wave of repricing across more than 30 lenders as early February draws near. The move points to rising funding costs and a live RBA rate hike risk. Coverage highlights the scale of increases across terms and lenders source. For borrowers, CommBank fixed rates now start from a higher base.
Wholesale funding and swap markets have pushed up banks’ costs, while tougher deposit competition adds pressure. When markets price in a potential RBA rate hike, fixed terms move first. Lenders rebuild buffers to protect margins and manage pipeline risk. CommBank fixed rates reflect this shift in forward pricing, not just today’s cash rate. That is why fixed home loan rates can rise before any official decision.
What it means for borrowers
New fixed offers are higher and may favour shorter terms to limit risk. That reduces the appeal compared with late 2024. Still, predictability matters for households wanting certainty. CommBank fixed rates set a new reference point that others often follow. Compare total cost, not just the headline, and weigh break fees, offsets, and redraw features when choosing fixed home loan rates.
Variable borrowers are not directly hit by today’s change, but they could face higher repayments if the RBA raises the cash rate in February. Build buffers now by paying extra where possible and trimming non‑essential spend. Ask your lender about rate lock options for applications in progress so a rising market does not erode your budget before settlement.
Bank margins and the housing outlook
Higher fixed pricing can support bank margins if deposit costs stabilise, but competition remains intense. Cashback offers are rarer, and pricing is more disciplined. Retention teams will target customers coming off low fixed terms from 2021–22. Expect tighter serviceability and fewer exceptions as credit teams price risk more carefully.
Higher Australian mortgage rates reduce borrowing capacity and can slow turnover, especially for first‑home buyers. Listings may rise as some owners refinance or sell. Clearance rates can soften if credit tightens. Reports flag rising repayment pain for households as fixed rates lift source. Watch pre‑approvals and auction results for early signs of demand shifts.
How to plan your next move
If you value certainty, a shorter fixed term or a split loan can balance protection and flexibility. Consider break costs, offsets, and extra repayments rules. For more on the trade‑offs, see this practical guide to fixing your loan source. CommBank fixed rates are a signal to review options promptly.
Check the comparison rate, not just the headline rate. Review fees, offset access, and repayment flexibility. Ask about rate lock periods, especially if settlement is weeks away. Collect written quotes from at least three lenders or a broker in the same 24‑48 hour window so shifting markets do not skew comparisons.
Final Thoughts
CommBank fixed rates moving up to 70 bps show that markets now see a real RBA rate hike risk in early February. Funding costs have risen, so fixed home loan rates adjusted first. For borrowers, the playbook is simple: review your pre‑approval, compare fixed, split, and variable options on total cost, and ask about a rate lock if you are close to settlement. Stress‑test your budget at least one percentage point higher than today’s rate, and prioritise an offset or redraw for flexibility. If you are refinancing, collect same‑day quotes to avoid market noise. These steps help protect cash flow while conditions remain tight.
FAQs
Why did CommBank fixed rates rise now?
Markets are pricing a possible RBA rate hike in early February, which pushes up swap rates and bank funding costs. Lenders moved early to protect margins and manage pipeline risk. Fixed terms adjust first because they reflect expected future rates, not only today’s cash rate. That is why offers rose before any RBA decision.
Should I fix my home loan now or wait?
It depends on your priorities. If certainty matters, consider a shorter fixed term or a split to balance risk. Compare the total cost, break fees, and features like offsets. If you think rates may rise, a rate lock can protect your application while you finalise the loan and settlement timeline.
How would an RBA rate hike affect my repayments?
If the RBA lifts the cash rate, variable rates usually move soon after, raising monthly repayments. Fixed borrowers are insulated until their term ends. If you are on a variable or near the end of a fixed period, build a buffer now and compare refinance options to limit the impact on cash flow.
What is a rate lock and is it worth it?
A rate lock holds the offered fixed rate for a set period, often for a fee, protecting you from increases before settlement. It can be useful in a rising market where CommBank fixed rates and other lenders’ pricing are moving higher. Weigh the fee against potential savings if rates rise further.
Will higher fixed rates hit property prices?
Higher Australian mortgage rates reduce borrowing capacity, which can slow sales and pressure prices at the margin. Effects vary by region and property type. Watch listings, clearance rates, and discounting. Buyers with strong deposits and pre‑approvals may find more negotiating room if credit conditions stay tight.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
