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CBA will require first home buyers to contribute at least 3 per cent of the purchase price on top of any government grants to secure a mortgage, amid concerns over loan quality and likely defaults.
CBA’s new requirement is the result of growing concerns over the quality of loans to first home buyers and in anticipation of rate hikes in the years ahead.
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CBA’s chief concern is that the beefed-up first home owners grant allows some purchasers to lay down a 5 to 10 per cent deposit with no cash contributions of their own.
“Customers who have some skin in the game in terms of their own funds are more committed to continue their repayments,” said Ross McEwan, CBA group executive retail banking services in a report in The Australian.
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