Powered by MOMENTUM MEDIA
the adviser logo
Lender

CBA doubles waiting period for IO switch

by Lucy Dean4 minute read

The waiting period for customers seeking to switch to an interest-only repayment method has doubled from 90 days to 180 days at a major bank.

As of 31 July, customers with Commonwealth Bank (CBA) will be required to wait 180 days to change to an interest-only (IO) loan, while requests to switch within 180 days of loan funding will be sent on for credit assessment.

To continue reading the rest of this article, create a free account
Already have an account? Sign in

In addition, clients with loan-to-value ratios (LVR) of more than 80 per cent will not be able to refinance from a principal and interest (P&I) loan to IO within 180 days of funding.

Effective on the same date, the maximum IO terms have been reduced (over the life of the loan) to five years for owner-occupied home loans and 10 years for investment home loans.

Advertisement
Advertisement

Document identification

CBA is also changing the application identification process for new clients, effective 31 July. Brokers will need to acknowledge that they have viewed original identification documents for all borrowers and guarantors, and brokers must provide clear copies of the original (and sighted) identification documents when the application is submitted.

Furthermore, in the case of multiple applicants, brokers must submit each applicant’s identification documents on separate pages for each loan application.

CBA warned: “Missing documentation or discrepancies may result in delays to the customers’ application.”

[Related: Bankwest to lift rates for existing borrowers]

cycle

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

ABA finalists

Finalists for 2022 Australian Broking Awards revealed!

Run with the support of principal partner NAB, the Australian Broking Awards – which is now in its 12th year –...

READ MORE
Anthony Albanese new ta

Home owners in flood regions offered cash payments

Speaking at a press conference on Wednesday (6 July), Prime Minister Anthony Albanese confirmed that residents in the...

READ MORE
Sam Henley

Fifo invests further into BDM team

According to Fifo Capital (Fifo), Sam Henley joined the lender as its senior business development manager –...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more