Our current loan is with CBA for $472k and our property value is $850k. We would like to top up our loan by $100k but the lender at CBA has turned around and told us that we are unable to do that because they believe we won't be able to service the loan. The reason for this assessment is that they're checking our ability to service the loan at 7.35% rather than our existing rate because the current interest rates are at an all time low and their lending criteria has gotten stricter. I've never heard of anything like this before, especially as two years ago CBA were throwing money at us to increase our loan. I am confused as to why such a high rate is being used when our current variable rate is 4.35%. Has anyone been in this situation before and overcome it? Do we need to look at switching to a different bank?