Commonwealth Bank of Australia (CBA) has just unveiled a compulsory new digital tool, the Interest Only Simulator, which will be incorporated into its third-party lending process.
The Interest Only Simulator will be accessible via CommBroker, and will show customers the differences between interest-only and principal-and-interest repayments, as well as the financial impacts over the lifespan of both types of loans.
The usage of the new tool will be mandatory from October 6 onwards for all customers applying for new interest-only loans.
“The new tool will make it easier for our brokers to have conversations with customers about their needs and their loan options,” a CBA spokesperson told Australian Broker. “It will also help ensure customers understand what type of loan is best for them and their situation.”
A compulsory Customer Acknowledgement Form will also be included with the tool. This form will be submitted with all interest-only home loan applications to ensure that such arrangements meet the clients’ needs.
Brokers are required to provide customers with a copy of their Customer Acknowledgement Form as a record of the discussion, and the copy can be sent electronically as a pdf attachment through email.
“We encourage our customers to choose principal-and-interest repayments to help them build equity in their home, where this meets their needs and objectives. Customers who currently make interest-only payments are encouraged, where they are able, to switch to principal-and-interest repayments,” the CBA spokesperson said.
It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That’s why it’s important to not only check the right rates, but make sure that you’re getting the right features in your home loan. Get help choosing the right home loan