CUA cuts fixed-rate mortgages to undercut major banks

Credit Union Australia (CUA) has cut its three-year fixed-rate home loan for the third time in the space of five months, taking it below that of the major banks. 

The move follows the RBA leaving rates on hold yesterday and speculation that the major banks might raise interest rates on standard variable mortgages this week. 

The mutual, one of the biggest in Australia, with 400,000 customers, will reduce its three-year fixed rate by 39 basis points from February 13, taking the interest rate from 6.34% to 5.95%. 

CUA says it now offers one of the lowest three-year fixed-rate home loans in the market – 43 basis points lower than the average of the big fours’ three-year fixed-rate home loans.

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Based on an average loan size of $300,000 with a 30-year term, a three-year fixed-rate home loan from CUA at this rate could save borrowers $84 per month, or $3,024 over the three-year duration of the loan, compared with the average rate of the big four banks on the same product. 

“CUA is committed to offering customers the best deal we possibly can. Because our customer owned model enables us to focus entirely on our customers, not on shareholders, we have more flexibility to make rate decisions that are in their best interests,” says Jason Murray, CUA’s acting general manager for products and marketing.