Overtime income won't count as much as CBA tightens home loan lending

Overtime income won't count as much as CBA tightens home loan lending
Overtime income won't count as much as CBA tightens home loan lending

The Commonwealth Bank of Australia has informed mortgage brokers that new borrowers' existing debts and their incomes are to be assessed more stringently.

CBA will apply a servicing loading of 20% to all repayments on existing home loans and lines of credit held by customers.

The 20 per cent loading means repayments that were assessed at $1000 a month will now be assessed at $1200 a month.

CBA also said it would accept only 80% of income from overtime, bonuses, and investment income when it is assessing home and investment loan applications. 

The maximum loan-to-valuation ratio for all owner-occupied home loan applications would be 95%, compared to currently allowing LVRs of up to 97%, including the cost of mortgage insurance.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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