Commonwealth Bank (CBA) has clarified its stance on the broker channel after officially launching its controversial digital home loan offering for new-to-bank mortgagors that is only available online.
The Digi Home Loan product, available to eligible homeowners looking to refinance from another financial institution, offers interest rates starting from 6.15% p.a at a maximum LVR of 80% for eligible customers (Owner Occupied, Principal and Interest repayments).
Customers with Homeowner status as part of CBA’s loyalty program Yello, will qualify for a monthly cashback on their Digi Home Loan starting at $10 per month. Additionally, eligible customers will receive a loyalty cashback that increases over time and kicks into action after the first anniversary of the loan.
Given the process is digital and completed via the CommBank app or NetBank, customers can expect to receive conditional approval “in a matter of minutes,” according to Commonwealth Bank of Australia’s executive general manager home buying, Dr Michael Baumann (pictured above).
“We developed the Digi Home Loan as we know there is a growing number of customers seeking a self-managed, digital home lending experience,” said Baumann.
“We are committed to creating a suite of products that meets our customers’ needs via all of the channels available to us – be it our network of lenders, mortgage broker partners, or via our phone or digital channels.”
Available to customers directly, the Digi Home Loan product is the first CBA-branded offering that doesn’t operate through its broker channel or its digital branch, Unloan.
While some may question whether this would undercut both channels, Baumann insisted each channel addresses different customer needs.
“Over the past few years – especially since COVID – we have witnessed a continued shift in the proportion of customers who feel comfortable doing things digitally and doing things themselves,” Baumann said.
“Through Unloan, we can provide those customers who are comfortable using digital technologies for their home loan needs with a competitively priced home lending solution.”
Baumann said the Unloan proposition is targeted at customers with basic home lending needs, who are looking for a home loan provider that doesn’t provide full-service banking needs.
“For those customers who are comfortable self-serving and utilising digital channels for their home lending needs and still want a holistic banking relationship, our new Digi Home Loan is well positioned to meet their needs given the breadth of offerings the CBA yellow brand provides.”
“We will continue to invest in our home loan proposition across our range of brands and channels, to meet customers where they are, and in the way they prefer.”
Launched in 2022, Unloan has itself been subject to broker scrutiny after it brought in an introducer program in February, offering commissions to professionals for clients who settle mortgages.
CBA’s decision to launch another direct product comes after a year of shifting priorities for the major lender.
In July 2023, the CBA CEO Matt Comyn said that brokers remain an important part of support for its customers after ending its cashback offers in the months before as the mortgage wars fizzled out.
The major bank’s mortgage books then went on a three-month slide in one of the worst growth periods in its recent history.
By November, CBA had stated it would focus on its proprietary channel during its quarterly results and in February CBA chief financial officer Alan Docherty said the bank would “not participate in unprofitable mortgage lending”.
Despite this Baumann said the “broker channel remains an integral part” of the business.
“As Australia’s largest lender with the highest volume of broker originated loans, we remain committed to this channel – which is evident from the ongoing investments we have made and continue to make,” Baumann said.
“We know mortgage brokers are looking after their customers and guiding them through the complexities of buying property and obtaining finance. We remain committed to the broker channel as you can see from our significant investments into people as well as broker-technology.”
Baumann pointed to recent examples including the launch of Your Applications and enhancements to Your Loans, as well as the bank’s commitment to ongoing learning and development opportunities through our Broker Training Hub.
“We have also made enhancements to our accreditation criteria to make it easier for new brokers to become accredited with us. We continue to make operational improvements, including the recent upgrade of our Home Loan Pricing Tool as well as the implementation of a self-employed deal desk,” he said.
“And, we are continuously reviewing and streamlining our lending policies. We will shortly be launching further tech enhancements that we hope will deliver greater business efficiencies for our broker partners.”
Baumann said driving innovation for its customers – including the delivery of distinct and differentiated customer experiences – is core to CBA’s strategy.
“For those customers who value face-to-face support in the home loan journey, they can and will continue to benefit from the personalised home loan service that comes via our network of CommBank lenders or mortgage brokers.”
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