CBA to change lending policy from November 25

From November 25, the Commonwealth Bank of Australia will change aspects of its lending policy.

The new policies outline that rental income from a residential property used for servicing cannot exceed 8% of the owners estimated value or contract of sale amount. 

This means the CBA will only accept a maximum gross rental yield of 8% for servicing.

Additionally, a new rental income referral rule will apply for applications in categories 3, 4, and 5, where the rental income is more than 50% of the total income used or servicing.

CBA spokesperson Steve Batten told Property Observer, “The rationale behind this change is that high rental yields in some areas of the country, particularly in mining towns, are not sustainable.

While this only will impact a very small number of customers, we would like to ensure we continue to lend responsibly. As such home loan/investment home loans and lines of credit reliant on rental income from a residential security for servicing will not be able to exceed the 8% rental yield.

On average the rental yield around Australia is approximately 4.5%.”