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The major bank has announced its new ‘Simple’ variable rate home loan option is now available to brokers.
The Commonwealth Bank of Australia (CBA) has announced that its new Simple Home Loan is available to the third-party channel, providing a straightforward mortgage option to customers “who value simplicity and want to take control of what they pay for”.
The variable rate home loan allows customers to link up to two offset accounts, enabling them to save on interest by reducing the principal amount on which interest is calculated.
Key features of the Simple Home Loan include:
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Flexible repayments: Borrowers can make unlimited additional repayments without penalty and access redraws on these extra payments. The loan also offers the option for interest-only payments for up to five years for owner-occupied loans and up to 15 years for investment home loans.
- Negotiable rates: CBA has said that borrowers can “negotiate” their interest rate with a home lending specialist when applying for a Simple Home Loan (discounts available at the discretion of the bank).
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Top-ups: Existing Simple Home Loan customers can increase their loan by $10,000 or more to access additional funds when needed.
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CommBank Yello benefits: Eligible CommBank Yello customers can receive up to $15 cashback on their monthly loan service fee, providing a potential saving for loyal customers.
The Simple Home Loan comes with a $300 upfront establishment fee and a $20 monthly loan service fee. A monthly offset feature fee of $10 also applies if one or more offset accounts are linked.
Interest rates for the Simple Home Loan vary based on the loan-to-value ratio (LVR) and whether the property is owner-occupied or an investment.
For owner-occupied, principal and interest repayments, rates start from 5.84 per cent per annum (p.a) – or 6.09 per cent p.a. comparison rate – for LVRs under 60 per cent.
Investment loan rates are slightly higher, starting at 6.04 per cent p.a. (6.29 per cent p.a. comparison rate) for LVRs under 60 per cent.
The loan is also not available to company or trust borrowers, nor is it suitable for split loans, purchase of land, building and construction loans, or bridging finance.
CBA’s general manager of third-party banking, Baber Zaka, told The Adviser: “Our Simple Home Loan is a market-leading product that empowers customers by providing them with options that can be tailored to fit their unique financial situations.
“Distinct from comparable offerings, the Simple Home Loan enables customers with the opportunity to link up to two offset accounts for $10 a month per Simple Home Loan, helping them save on interest, repay their loans faster, and manage their finances more effectively. Customers can opt in and out of the offset accounts as they choose, to suit their financial situation.”
He added: “This was all about listening to customer and broker feedback and acting on it — simplifying our offering to make it easier for brokers to support their customers with clarity and confidence.
“We know how important it is to remove complexity and deliver consistent experiences. This is another step forward in that direction, and I’m proud of the collaboration that made it happen.”
The major bank has made several changes to its service offering and policies based on broker feedback in recent months, including changes to its tier offering and updates to HECS debt and construction policies, which have reportedly been influenced by insights from the broker community.
CBA’s GM for third-party banking said that the big four bank was also actively exploring new policies to accommodate evolving customer needs, such as those with income from boarders and the growth of multiparty home ownership.
The bank is also focusing on improving efficiencies for brokers through enhanced settlement status updates, the integration of AI into chat interfaces, and a comprehensive training hub that offers 24/7 access to resources.
You can find out more from Baber Zaka on CBA’s broker strategy in The Adviser’s In Focus podcast.
Tune in to The broker strategy of Australia’s biggest bank, sponsored by CBA, here:
[Related: CBA unpacks its broker strategy]
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