Commonwealth Bank has followed its peers by raising its variable rates for interest-only mortgages, becoming the last of the big four banks to adjust its rates mix in an attempt to slow down riskier lending.
CBA will from July 7 lift interest-only rates for both owner-occupiers and investors by 0.30 percentage points as it tries to comply with the Australian Prudential Regulation Authority's demand that interest-only lending makes up less than 30 per cent of new residential mortgages.
It also dropped principal and interest variable rates for owner-occupiers by 0.03 percentage points, following similar moves by NAB, ANZ and Westpac over the past three weeks.
CBA says borrowers on interest-only repayments can switch to principal and interest without a fee.
"For owner occupier customers repaying principal and interest, they can take advantage of the interest rate reduction to pay off their home loan faster," CBA retail banking executive Matt Comyn said.
"These changes also help us keep the right balance in our home loan portfolio, in line with what our regulators require."
CBA's owner-occupier interest-only variable rate will rise to 5.77 per cent, with investors paying 6.24 per cent.
Its standard variable rate for owner occupiers repaying principal and interest mortgages will fall to 5.22 per cent.
Its investor principal and interest rate remains unchanged at 5.80 per cent.
Like its rivals, CBA said the rates changes were not a response to the federal government's bank levy.
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