CBA will cover your mortgage for a year in the case of death or illness
The death or terminal illness of a family member can place an overwhelming financial burden on families, especially if that person was the primary bread winner. With the loss of this income stream, mortgage repayments and other costs can quickly pile up with no way to meet them.
A new scheme from the Commonwealth Bank would cover mortgage payments of affected customers for about a year.
The Home Loan Compassionate Care scheme provides complimentary protection to owner-occupied homeowners by paying their repayments for around 12 months, irrespective of whether the loan was taken out with the bank directly or through a broker. While the scheme is a form of insurance, there is no need to sign up.
The total amount is capped at $120,000 for each insured person across all eligible home loans. It's also a one-time only deal, so you won't be able to claim for the same person again in the future.
To be eligible, individual borrowers must be aged 18 to 59; spouses aged 18-59; and dependents aged 18 and under.
Meanwhile, an eligible home loan is a fully or partially funded Commonwealth Bank owner-occupier home loan, including the Standard Variable Rate Home Loan, Fixed Rate Home Loan, and Extra Home Loan.
Research by the bank has found that only a third of Australians would only be able to cover home loan repayments for up to six months if they, their spouse or a dependant died or was diagnosed with a terminal illness. Worse still, 10% homeowners would only be able to cover mortgage repayments for a month or less.
"We know that mortgage repayments are the single biggest financial commitment for Australian homeowners, so when the unthinkable happens we'll support our customers by making their home loan repayments for around 12 months at no cost," says CBA group executive Angus Sullivan.
The research also revealed that more than half of Australian homeowners have not discussed with their spouse or dependants how they would meet ongoing home loan repayments if they died or were diagnosed with a terminal illness.
"If something were to happen, the last thing you should have to worry about is your home loan. In designing this protection, we've made sure there's no need to sign up or to activate it," says Sullivan.