| Overview |
|---|
flagFounded: CBA uses Helia (formally Genworth) to insure its home loans. Listed in 2014, founded overseas in 1871 CBA’s Low Deposit Premium (LDP) was founded in 2009 |
businessLenders they support: CBA Aussie Home Loans (wholesale funding) |
monetization_onMax LVR: 95% LVR |
securityLMI Provider: Helia and Self Insured (CBA) |
account_balanceLender type: Compare using our LMI calculator | See below for CBA’s LMI premium table |
There’s LMI and then there’s LDP…
If you apply for a home loan with the Commonwealth Bank that’s over 80% of the property value then your loan will be insured in one of two ways.
The most common method is for Helia to approve your home loan under a Delegated Underwriting Authority (DUA). That means you’ll pay a normal LMI premium and your loan will be assessed by one of CBA’s credit assessors.
However, if you have a low risk application, which typically means that you’re an existing CBA customer, then CBA’s system may decide that your loan can be self-insured.
That means that CBA charges you a fee known as a Low Deposit Premium (LDP) and CBA then takes on the risk themselves. The good news is that is that you pay a reduced premium since there is no stamp duty on the LMI premium.
How does CBA’s LMI / LDP compare?
They’re great at
- Approving loans under their DUA
- Using a fair and accurate credit score
- Assessing unusual employment
- Accepting remote locations
- Considering rent as genuine savings
But they’ve got some drawbacks…
- Investors and the self-employed are charged a higher LMI premium
- They rarely approve loans over $1,000,000
- Helia is very conservative when assessing loans outside of CBA’s DUA
- Their credit score is tough on people who have overdrawn their account with CBA
Talk to one of our expert mortgage brokers to find out if Commbank is right for you.
Call us on 1300 889 743 or complete our free assessment form online.
CBA is watching you…
CBA knows you much better than you think.
If you bank with CBA then that’s a no brainer: their system will analyse your spending habits and can profile you quickly using a credit score. They could potentially even look at the data from your Dollarmite account from school!
What if you don’t bank with CBA? Surely they don’t know you!
Actually, they do. With a large ATM network and merchant facilities supporting many retail outlets, they’re able to collect a large amount customer data. Combined with the data in your credit file and home loan application, they know a lot about how you spend and manage your money.
That’s why their credit score is so accurate compared to other banks. They tend to approve people who are good borrowers and decline people who aren’t. And that’s a good thing for everyone.
Their DUA is incredible
Technically, Helia underwrites most of the LMI premiums for CBA but it’s actually rare that Genworth sees a loan application. That’s because Helia trusts CBA to approve the LMI cover on their behalf.
This is known as a Delegated Underwriting Authority and it gives CBA the freedom to approve a lot of loans that Helia may not be comfortable with.
That’s the big advantage with CBA and we regularly see them approve loans that have been declined by other lenders or LMI providers.
CBA’s LMI Premium table
| LVR | $0 – $300,000 | $300,001 – $500,000 | $500,001 – $600,000 | $600,001 – $750,000 | $750,001 – $1,000,000 |
|---|---|---|---|---|---|
| 81% | 0.48% | 0.57% | 0.90% | 0.90% | 0.91% |
| 82% | 0.48% | 0.57% | 0.90% | 0.90% | 0.91% |
| 83% | 0.60% | 0.70% | 0.93% | 1.09% | 1.11% |
| 84% | 0.66% | 0.83% | 0.96% | 1.09% | 1.15% |
| 85% | 0.73% | 0.97% | 1.16% | 1.33% | 1.41% |
| 86% | 0.88% | 1.08% | 1.26% | 1.41% | 1.46% |
| 87% | 0.93% | 1.15% | 1.41% | 1.63% | 1.73% |
| 88% | 1.06% | 1.30% | 1.46% | 1.63% | 1.75% |
| 89% | 1.30% | 1.62% | 1.95% | 2.22% | 2.39% |
| 90% | 1.46% | 1.87% | 2.18% | 2.37% | 2.52% |
| 91% | 2.01% | 2.62% | 3.51% | 3.78% | 3.82% |
| 92% | 2.01% | 2.67% | 3.57% | 3.87% | 3.93% |
| 93% | 2.33% | 3.03% | 3.80% | 4.08% | 4.16% |
| 94% | 2.38% | 3.03% | 3.80% | 4.29% | 4.32% |
| 95% | 2.61% | 3.35% | 4.00% | 4.61% | 4.60% |
81% LVR actually means 80.01% to 81% LVR
The score decoded
Every application with CBA gets given a score from 1 to 5.
Typically a 1 or a 2 is a low risk customer and CBA will bend their policies to try to help your loan get approved.
A 3 is a complex application or one with concerns. An experienced credit manager will assess your home loan application and will make a decision.
A 4 or 5 is a high risk application and they rarely get approved. While it’s possible to argue and provide additional information to get a 4 approved, it’s rare for CBA to approve a 5.
Your mortgage broker can ask the bank what they scored your loan at. We’d recommend if you scored a 5 that you try another lender.
Should you apply with CBA?
Not sure which home loan is right for you? Our Home Loan Experts can help!
Talk to one of our specialist mortgage brokers by calling us on 1300 889 743 or by completing our free assessment form.
