Commonwealth Bank has made a subtle change to its mortgage refinancing process to provide “more clarity” for customers.
Mortgage customers who want to leave the bank and move their home loan to another lender must now go through an additional step in order to do so.
To start the external refinancing process, the client or the client’s mortgage broker must call the CBA and speak with a staff member about their decision to ditch the banking giant.
Previously, those who wanted to start the process of canceling their loan could do so by completing the corresponding form, which was available to download online.
CBA’s website now directs clients to call them to discuss their outside refinancing options.
“Make sure you get the most out of your CommBank home loan before you consider refinancing to another lender,” the website says.
“We’ll have to talk to you (as one of the borrowers), or your recognized broker, if you have one.”
Clients are asked to call between 8 am and 6 pm Monday through Friday to “discuss your options or begin your discharge if you choose to continue.”
A CBA spokesperson told news.com.au that the bank has updated its refinancing process to improve customer service and provide “more clarity” at the start of the process.
“Following feedback from our clients, lenders and brokers, we now talk to our clients early in the refinancing process so we can help them make an informed decision about the best next steps for them in their ownership journey,” they said.
“We have a dedicated team of home loan specialists who are available to provide our customers with information and clarity on their home loan situation.”
Requiring a phone call to cancel a loan is not uncommon for banks.
The move shows the CBA may be trying to find new tactics to retain customers and prevent them from switching to rival lenders.
This isn’t the only recent change the banking giant has made, as the CBA slashed interest rates on additional home loans for new borrowers last week.
The discount goes into effect on September 2 and means homeowner-renters will save 0.1 percent on their home loan.
It also means investors could experience drops of up to 0.8 percent.
The lowest variable rate is now 3.69 percent, down from 3.79 percent.
Investors with loan-to-value ratios between 80.01 and 90 percent can also expect their rates to drop from 5.29 percent to 4.49 percent.
CBA said the changes were part of its ongoing review of interest rates and market conditions to “remain competitive and meet customer needs.”
It is the second time CommBank has discounted its variable rates for new customers since the Reserve Bank of Australia hikes began.
The bank also cut its additional mortgage loan rates by 0.15 percentage point at the end of June.
The move is likely to offer some relief to Australians currently struggling with the cost of living crisis; however, the offer is not extended to existing customers.
In a message to existing CBA clients, Rate City research director Sally Tindall said those who already have home loans with the bank won’t see this discount “unless they do something about it.”
“Don’t bother getting mad at your bank, getting even, getting into some tough negotiations, or switching to a lender that values your business more,” he said.
The RBA is expected to raise interest rates once again, with a 0.5 increase expected on Tuesday.
The move will be the fifth consecutive increase in Australia’s cash rate, with an expected rise of 2.35 percent, meaning interest rates would hit their highest level since December 2014.
Rate City has warned that the average variable borrower could see their monthly payments increase by $144 if banks pass the increase on in full to customers.
“If this happens [a 0.5 per cent increase]the average homeowner-renter with an adjustable-rate mortgage could be paying an interest rate of more than 5 percent,” said Ms. Tindall.
“As a result, the average borrower would see their total monthly payments increase by more than $600. That is a lot of extra money to accumulate month after month.”
– with NCA NewsWire