80% of home owners prioritise loan flexibility: CBA

Almost 80 per cent of home owners cited home loan flexibility such as redraw and multiple offset accounts, along with flexible features including the ability to change repayments in an app or online was key to their needs.

According to the Commonwealth Bank of Australia (CBA), there were subtle differences in home loan priorities when analysing the needs of different generations.

Baby Boomers and Gen X respondents returned similar data in terms of their top priorities.

The Baby Boomer generation listed a range of different flexible features as top priorities with one in two respondents stating that redraw facility was crucial, and a quarter said multiple offset accounts were a “must-have”.

In addition, 41 per cent of Baby Boomers stated that general home loan flexibility, such as the ability to streamline repayment changes or loan types, would be an important feature in terms of looking for a new loan.

Gen X also labelled home loan flexibility as a top priority for their next loan, with two in five listing cashback offers as a major consideration.

The younger generations of home owners, while still listing home loan flexibility as a top priority, also cited digital tools and the ability to easily access home lending specialists as a priority.

For Millennials, flexible features, multiple offset accounts and redraw facilities were priorities, with two in five respondents labelling these as key factors. Not too dissimilar from the digitally focused Gen Z cohort, 25 per cent of Millennial home owners also stated that having an app to manage home loans in one place was a key feature.

Almost 60 per cent of home owners said the ability to make instant changes to their repayment amount via apps would make a difference, while 61 per cent said this would make it easier for them to manage their mortgage.

CBA’s executive general manager, home buying, Dr Michael Baumann, stated: “Often dubbed as ‘digital natives’, it’s hardly surprising to learn 32 per cent of Gen Z homeowners labelled an app for managing your loan in one place as a key feature for their next home loan.

“Interestingly, despite their desire for digital tools and features, this cohort also said support from their lending specialist was one of the factors they considered when choosing a future home loan.

“It shows the continued demand for a blended experience of digital self-service and expert support and assistance.”

Dr Baumann added that it is clear from the research that home owners “are looking for a mortgage and lender that can evolve with them throughout their life”.

“In fact, when homeowners were asked what their biggest concern was when it comes to taking on a home loan, more than 50 per cent said they would be concerned if their loan wasn’t flexible and they couldn’t make changes to it as needed,” Dr Baumann concluded.

“This included concerns around not being able to make changes to their loan if their circumstances changed or that they would not be covered if something happened to their family and they couldn’t make their repayments.”

The chief executive of BOQ Group, George Frazis, recently announced that all banks under the BOQ brand will have digital mortgages by 2024/25.

This is a continuation of the group’s digitisation process, with reportedly $1.5 billion deposits in the group’s digital platform already. BOQ intends to build and test its home loan core and origination before launching “simple” digital mortgages for new customers in 2024.

[RELATED: BOQ Group to roll out digital mortgages in 2024/25]

Written by Adrian Suljanovic

Last Updated: 28 October 2022

Published: 31 October 2022