CBA's tighter home loans 'a Choice move'

Monday 23 February 2009

Article by Mozo

Australian consumer watchdog Choice has thrown its weight behind a new policy from the CBA that will tighten up home loan approval criteria.

The bank has announced that all new first-home buyers will need to stump up three per cent of a property’s price tags on top of any subsidies such as the first-home buyers grant.

Speaking to ABC, Choice spokesperson Christopher Zinn said that the new measures would allow first-home buyers to pay off their variable rate home loans quicker.

Meanwhile, Ron Silberberg, boss of the Housing Industry Association, said that the measures could help to avoid people falling behind in variable home loan payments because of cuts to interest rates.

“[Banks] should avoid situations where they tangle particularly first home buyers in loans that are too high and don’t allow for the possibility of rate changes,” he said.

There has been much speculation as to whether the Reserve Bank will cut interest rates again at its next meeting, with some arguing that the RBA can’t really go any lower.

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