The Commonwealth Bank of Australia – more generally known as CommBank – holds Australia’s biggest slice of the home loan cake. It’s behind more than a quarter of the nation’s mortgages. Despite that, the interest rates CommBank offers are typically higher than the market’s most competitive, according to InfoChoice market research.
However, it does offer features such as its Wealth Package, which provides certain discounts to a borrower’s interest rate, reduces upfront fees, and waives eligible credit card fees.
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Who does CommBank lend to?
CommBank lends to just about all types of home buyers, including first home buyers, owner-occupiers, investors, refinancers, and those building their home.
It also offers low doc home loans for those who might be self-employed or have an unusual income stream; green home loans, for those buying a low-emission or climate friendly home; and bridging loans.
CommBank also lends to those with a loan-to-value (LVR) ratio of as high as 95%. Though, borrowers with LVRs above 80% will likely be asked to pay lenders mortgage insurance (LMI).
Like all Australian banks, it has to abide by regulatory requirements when providing loans. Thus, the bank will likely deny a person it deems unsuitable for the home loan they’re applying for.
First home buyers
Not only does CommBank lend to first home buyers, it's one of more than 30 lenders that participate in the First Home Guarantee and Regional First Home Guarantee. Under the guarantees, a select number of first home buyers need only a 5% deposit to dodge LMI, with the government acting as guarantor for up to 15% of their eligible property purchase.
Self-employed borrowers
CommBank offers certain products that could suit a self-employed borrower who can’t fulfil typical serviceability requirements. The bank’s low doc home loan might be worth considering if you have the means to service a home loan but not the ability to prove it.
Does CommBank charge LMI?
While CommBank will loan to some borrowers with an LVR of as high as 95%, they might charge LMI (or a Low Deposit Premium) to those unable to boast a 20% deposit. The bank’s LMI is provided by insurance giant Helia (formerly known as Genworth).
Refinancing
When it comes to refinancing, CommBank offers access to FASTReFi. It allows eligible borrowers seeking to refinance their home loan to CommBank – perhaps to take advantage of a better deal – to do so in a matter of days. FASTReFi manages the refinancing process on behalf of the bank a person is leaving.
Additionally, CommBank has a digital refinancing application that means customers can submit their refinancing application and provide identification, consent, and undergo serviceability and credit assessments online.
Casting your eye over your home loan every once in a while is a good way to make sure your mortgage is still serving your needs.
Offsets, redraws, repayment holidays, and other benefits
CommBank offers borrowers the option to open offset accounts linked to one its standard variable rate or investment home loan products. There are no fees charged for having an offset account, however using certain features can incur fees.
CommBank’s variable home loan products also offer redraw facilities with an unlimited number of redraws allowed.
Its fixed rate home loans offer neither offset accounts nor redraw facilities. However, the bank’s fixed rate home loans do offer the option for those signing up to lock in their reference rate (the fixed rate at the time of their application) for 90 days in exchange for paying a $750 fee.
It also allows borrowers to ‘top up’ their home loan, borrowing more under the same facility, and to split their loan, perhaps choosing to fix rates on one portion of a home loan while another is subject to variable rates.
Further, CommBank offers borrowers the option to take a repayment holiday (usually of between three to six months) if they’ve made extra repayments over the life of their loan. It may also offer support if you’re struggling to make repayments due to you or someone in your family being diagnosed with a terminal illness or passing away.
Fees
Like most home loan products, those offered by CommBank often garner fees, a few of which we will detail.
First up, the bank charges an annual fee for the use of its Wealth Package. Borrowers who choose to utilise the package could receive a discounted interest rate based on their LVR and access to additional discounts and loan type. Those with the package also don’t pay upfront home loan establishment fees, monthly service fees, and can make use of a fee waiver on one eligible credit card.
The bank might also charge a fee if a borrower makes more than $10,000 of extra repayments on their fixed rate home loan in a 12 month period.
Can I pay off my CommBank home loan early?
CommBank does allow a borrower to pay off their home loan early. However, if they have a fixed rate home loan they might incur an early repayment fee for doing so.
If they have a variable rate home loan, they can make as many extra repayments and even close their mortgage early without incurring any extra charges.
