The CBA will implement the changes starting August 26 for all new home applications from both proprietary and mortgage broker channels. Aside from discount reduction, prices of home loans have also been raised to control the demand.
Regulators have recently faced pressure to ensure that investor lending growth is kept below 10 per cent a year so as not to inflate a housing bubble that would make the financial system more unstable.
Discounts have been reduced by up to 15 basis points on new home loans after CBA was said to have aggressively given discounts on home loans to win market share which was reflected in the bank’s full-year earnings result released this August.
The discount reduction would affect new mortgage advantage packaged owner occupied and investment home loan applications. Eight basis points would also be shaved off the bank’s three-year special rate saver, extra life of the loan and extra introductory rate products.
Discounts offered by banks would usually ring up to 150 basis points on home loans’ standard variable rates or the rates which reflect the Reserve Bank cash rate moves.
A spokesperson for the nation's largest bank assured the public that CBA continues to focus on balancing the needs of customers and shareholders. The bank also constantly reviews its home loan products and interest rates so that prudent lending standards are maintained and customers' financial needs are met.
Collections: Mortgage News