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SYDNEY, June 6. Australia’s largest retail bank, the Commonwealth Bank of Australia (CBA), has announced new offers on essential utilities to help customers deal with rising mortgage costs and cost of living increases.
The bank announced on Monday a partnership with local telecom provider, More, and would give new home loan customers free Internet service for up to three years.
Additionally, existing customers would be able to save as much as 30 percent on their internet plans with the bank.
The move came as research from the CBA shows that the Australian home owners were preparing for an interest rate rise even before the Reserve Bank of Australia’s (RBA) first interest rate hike at the beginning of May.
“We know that the rising cost of living is being felt by all Australians, particularly those looking to purchase a property in the current environment,” said CBA Executive General Manager of Home Buying Dr. Michael Baumann.
“We want to support pre-approved home loan customers where we can, and that includes longer-term savings on essential and ongoing bills and commitments like Internet.”
On May 3 the RBA lifted interest rates by 0.25 percent, up to 0.35 percent, in response to growing inflation.
Projections by Sydney-based investment manager, AMP Capital, predicted that the next rise, to be announced on Tuesday, could be even sharper at 0.4 percentage or even 0.5 percentage points.
“Either way by year end we continue to see the cash rate rising to between 1.5 percent and 2 percent with a peak of 2 percent to 2.5 percent next year,” said AMP Chief Economist Shane Oliver.
These expectations have begun to soften Australia’s housing market and prompted major banks to roll out promotions to try and draw in a faltering customer base.
In recent weeks the CBA has announced a variety of promotions to entice customers, including fixed mortgage rates, and the option to make unlimited extra repayments to pay off their home as quickly as possible.
