Why getting a CBA home loan just got even harder


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Australians will find it harder to take out new home loans with the Commonwealth Bank after the lender tightened repayment tests for borrowers.

When customers with an existing CBA home loan apply for a new home loan, the bank will assess their ability to continue to repay the existing home loan in the same way they assess their ability to pay a new home loan.

That is, the bank will apply an interest rate buffer of either 7.25% or the current product interest rate plus 2.25%, whichever is higher.

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Customers with an existing home loan with another lender who apply for a Commonwealth Bank loan must demonstrate they can afford repayments on their existing loan plus 30%.

A 30% buffer on a $400,000 loan with another institution at the standard variable rate would see monthly repayments assessed at $2900 per month rather than $2223 per month.

The end result would be to reduce the applicant's borrowing power.

A spokesperson for the Commonwealth Bank said the changes were made to ensure that home loan customers were able to meet their repayments.

"This change brings us in line with the other majors."

The bank will assess loan applications submitted by June 9 under the previous guidelines.

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