Commonwealth Bank of Australia, has lowered its fixed rate mortgages

AUSTRALIA'S largest home lender, Commonwealth Bank of Australia, has lowered its fixed rate mortgages for the second time this month but says it cannot guarantee matching a likely rate cut next month by the central bank.

Commonwealth Bank today announced a series of cuts to its fixed rate home loans just hours after rival National Australia Bank promised to pass on in full a potential 25 basis point cut by the Reserve Bank of Australia (RBA) next month.

From August 25, the Commonwealth's one-year guaranteed fixed rate home loans will fall 25 basis points from 8.94 per cent to 8.69 per cent.

Full story at News.com.au

this is good news as the property market in Australia has been suffering as the cost of a mortgage has become prohibitive to most first and second home buyers.

The Australian dollar though has been hurt by the potential fall in interest rates, which has seen the pounds to Australian dollar exchange rate rise by almost 8 percent in the last 6 weeks.

The Australian Dollar outlook is for the exchange rate to hit 2.2000 in the coming weeks although that relies heavily on no further bad news from the UK. At the moment this seems very unlikely as the UK is being battered by poor growth, banks exposure to the continuing credit crunch, potential cut in UK interest rates and falling UK house prices.

Pounds to Australian Dollars exchange rate is currently trading 2.1400