Dec 07, 2017

Our Insights

Commonwealth Bank of Australia recently announced a number of lending policy changes that will affect new borrowers. 

Credit Assessment Summary (CAS)

Disclosure of information to CBA will increase; the bank has introduced extra paperwork which all personal borrowers will be required to provide when purchasing a property.

The Credit Assessment Summary is facilitated by your mortgage broker and will provide more detailed personal and financial information about you as well as outlining the objectives for the loan.

Postcode Restrictions

In addition, the bank will also apply the following restrictions on selected properties within selected postcodes, which will affect a small number of borrowers: 

  • Loan to Value Ratio Changes (LVR), reductions from 80% down to 70% will apply in certain postcodes before Lenders Mortgage Insurance is to be paid.
  • Rental Income Serviceability will decrease in some areas meaning the bank will reduce the percentage they count as income from your rental income down to 60-70%.

The changes will impact all types of properties and apply to all borrowers, including investors.

What do I need to do? 

If you intend to borrow in the near future, seek advice. At Calder Finance Broking we expect that other lenders will introduce similar initiatives and tighten lending policy over the coming months.

It comes on the back of growing concern about mortgage stress in Australia, which is reportedly set to affect one million households by 2018. 

It’s more important than ever to navigate the increasingly challenging world of mortgages and finance with the help of a broker.

Contact us when you are looking purchase a new property or refinance, and we will help you work through all of these issues and many more!

Written by Peter Bevan, Practice Manager 

For more information please visit the Calder Finance website or call us on (08) 8373 3333. Please note that Calder Finance Broking Pty Ltd is a Corporate Credit Representative of BLSSA Pty Ltd ABN 69 117 651 760 ACL 391237.