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The expansion of CBA’s rental income policy now allows the use of boarder income in home loan serviceability.
This means a home owner can rent out a room and use the income to help service the home loan.
Customers can count up to $150 per week in servicing, while a maximum of one boarding arrangement is allowed.
Stipulations say the loan must be for personal use, meaning owner-occupied purchase and refinancing.
Customers with applications involving guarantor support, claiming the First Home Owner Grants, or taking part in a Home Guarantee Scheme are also eligible to use boarder income in servicing.
“We’re pleased to have expanded our rental income policy to allow the use of boarder income in home loan serviceability. At CommBank, we’re constantly reviewing and monitoring our home loan policies and processes to see how we can best meet our customers’ home buying needs while maintaining our prudent lending standards,” said CommBank general manager third-party distribution, Baber Zaka.
“We’re also constantly looking for ways to enhance and evolve our third-party service proposition in line with the feedback we receive from our brokers, and we believe this policy change – which is a first among the major banks – is another step in the right direction.”
CBA joins NAB in offering this service, which it has done since 2021.
In a LinkedIn post, Entourage Finance partner Vincent Moore said the move was smart and progressive as it will greatly increase borrowing capacity for first home buyers.
"It’s a smart, progressive move. For many first home buyers, especially those living with a friend or sibling who helps with the mortgage, this can make a real difference to borrowing capacity,” said Moore.
“It’s something that I talked about before – how small, incremental policy changes can have a big impact for buyers trying to get their foot in the door.”
Moore said it will be interesting to see whether or not other lenders will introduce similar policy changes.
“While it’s not quite clear if this is for existing boarding arrangements or for potential buyers, but it is a welcome change to help more people – which is worth celebrating,” he said.
Founder of Madd Loans, George Samios, labelled the move a “game changer” as it could increase first home buyer income by $650 per month.
“This move will mean that many people can rent a room to a family member or friend and purchase a home, when before they may not have met eligibility criteria,” he said.
“They will be able to borrow around $50,000 more due to the extra rental income, which can mean the difference between getting the home you want and missing out.”
Samios said the introduced policy is already proving popular.
[Related: CBA unpacks revived broker commitment]
