CBA warns brokers on low-doc rate hike

by Mackenzie McCarty30 Oct 2012

The Commonwealth Bank has informed its broker network to contact their low-doc customers ahead of a 0.25% increase in the bank's interest rate for some low-doc loans.

In an update for brokers issued late last week, the bank said that it would be writing to all its existing low-doc home, investment and line of credit customers with loans that were funded before 1 April this year to inform them of a 0.25% increase in their rate.

The bank will also be changing the reference rate name on their loan, from Standard Variable Reference (SVR)/Base Variable Rate (BVR)/Residential Equity Rate to the low-doc Standard Variable Reference/Low Doc Base Variable Rate/Low Doc Residential Equity Rate.

The bank's update suggested brokers contact customers that might be affected, in case they have the necessary documentation to convert to a full doc loan, with additional features and benefits.

CBA said there would be no change to existing low-doc fixed rate loans during their fixed rate period, but that they would roll to the new referrence rate on maturity, including the 0.25% premium.

COMMENTS

  • by Brisbane Broker 30/10/2012 10:19:31 AM

    What? Cost of funding.

  • by Rach 30/10/2012 10:26:09 AM

    Contacted my entire database yesterday via email - don't have all that many directly effected, but you never know who knows who...Good opportunity to review and look at refinance options where customers can now go full doc !

  • by Coast Broker 30/10/2012 12:43:01 PM

    Typical arrogance of CBA. Should be some actual media coverage on this. Luckily only have 4 clients affected by this. I will make sure that I will refinance these clients away from CBA if I can. Why leave them their converting them to Full doc when a new application has to be completed with new application fees.