CBA tighten policies on interest-only home loans

CBA tighten policies on interest-only home loans
CBA tighten policies on interest-only home loans

The Commonwealth Bank has followed moves by ANZ and Westpac to tighten its policies on interest-only home loans.

Interest-only customers who want to refinance their loan with CBA will no longer be entitled to a $1,250 rebate.

Customers who want to take out interest-only loans will also need to hold a 20 per cent deposit, an increase of 5 per cent for owner-occupiers and 10 per cent for investors. 

The changes only applies to new customers and would reduce incentives for interest only borrowing.

The decision from CBA follows Westpac and ANZ Bank who earlier this week announced changes to its lending policy.

Westpac will no longer accept interest-only applications from owner-occupiers with a deposit smaller than 10 percent, up five percent.

They raised their interest-only fixed-rates for owner occupiers and investors at the end of April. So too did CBA.

ANZ Bank now demand a 20 percent deposit for home loans.

The changes are part of new regulations to attempt to cool the demand in the housing market and reduce interest-only lending.

The rules require the banks to limit their interest-only loan book to 30 per cent of total lending.

Currently the country's major banks lend close to 40 per cent of all loans on an interest-only basis.

 

Tags: 
Cba Interest Only

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