CBA lower its loan assessment rate again

Hi PCers,

Just bump into this article which states that CBA has lowered its loan assessment rate again from 5.75% to 5.4%.

CBA slashes mortgage serviceability rate

What do you think about it, will it make any meaningful impact to the market? Do you think there will be more lenders following to lower the assessment rate to low 5 or even 5%.

 

It's a recent trend, will have a smallish impact I think

 

Market is already going a bit nuts - money is cheap, borrowing capacity has increased a bit and sentiment is strong. We have a lot of owner occupied purchases on the go - its a small sample size but I think its reflective of the overall market.

Rental market on the other hand is a different story.

 

They're just lowering the floor rate. Their assessment rates remain 2.5% above the actual rate. This just gives them scope to remain competitive on servicing if rates fall further.

This is fairly irrelevant. There's a number of quirks in CBAs servicing calculations they're not very competitive for investors in their servicing. For simple deals they're about the same.

The CBA tends to distinguish itself with some niche policies, not servicing.