CBA cuts mortgage rate to record low

Lender takes on rivals by reducing fixed five-year rate to below 5 per cent.

The Commonwealth Bank has cut its mortgage rate to the lowest point ever offered as it seeks to win new customers.

The lender is offering a five-year fixed rate home loan at an interest rate of 4.99% per annum, some 0.7% lower than the previous rate it offered, effective today.

Executive general manager for retail products Lyn Cobley said the offer was an "opportunity for customers to lock in an extremely competitive rate for five years".

The Reserve Bank of Australia has kept the official cash rate on hold at a record low 2.5% since August last year in an attempt to encourage the housing market to help boost the economy as mining investment falls.

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