Ben Abbott Australian Broker online 30 October 2012
The Commonwealth Bank has informed its broker network to contact their low-doc customers ahead of a 0.25% increase in the bank's interest rate for some low-doc loans.
In an update for brokers issued late last week, the bank said that it would be writing to all its existing low-doc home, investment and line of credit customers with loans that were funded before 1 April this year to inform them of a 0.25% increase in their rate.
The bank will also be changing the reference rate name on their loan, from Standard Variable Reference (SVR)/Base Variable Rate (BVR)/Residential Equity Rate to the low-doc Standard Variable Reference/Low Doc Base Variable Rate/Low Doc Residential Equity Rate.
The bank's update suggested brokers contact customers that might be affected, in case they have the necessary documentation to convert to a full doc loan, with additional features and benefits.
CBA said there would be no change to existing low-doc fixed rate loans during their fixed rate period, but that they would roll to the new referrence rate on maturity, including the 0.25% premium.