The Commonwealth Bank of Australia (CBA) has launched a new feature in the CommBank app that allows customers to align home loan repayments with the date and frequency of incoming salary payments.
With the help of Harvard University’s STAR Lab, CBA was able to explore how the timing of large expenses relative to income can improve a person’s cash flow and thus make it easier to achieve their desired financial outcomes.
John Beshears, professor at Harvard Business School and member of the STAR Lab, said the initiative aimed to help keep people in sync with regard to money matters. This comes after CBA found in 2021 that eight in 10 customers were paid weekly or fortnightly, while most home loan repayments are made monthly.
“People’s financial lives have so many moving parts,” Beshears said. “Income arrives on one schedule, and each major recurring expense, such as a home loan payment, often arrives on its own separate schedule. When these schedules are out of sync, many customers have difficulty planning their spending. Luckily, there are ways to help customers avoid this source of stress.”
Typically, a home loan’s repayment frequency may be decided on at settlement. However, if your financial circumstances changed and the frequency no longer suited your income timing, it may be worth considering taking advantage of this feature to reduce the risk of financial stress.
Michael Bauman, executive manager for home buying at CBA, said emerging research has found making small changes like these can aid in managing overall finances.
“For many customers, home loan repayments are their biggest regular expense, and traditionally repayments are monthly with the repayment date determined by the settlement date of a property,” Bauman said. “The new feature in the CommBank app is designed to give customers control to be able to align their home loan repayments to when and how often they are paid.”
CBA will nudge customers via alerts in the CommBank app to notify them of the new feature.
