CommBank mortgage crackdown

THE nation’s biggest bank will hit some home loan customers with tens of thousands in interest charges by drawing out the life of their loans.

The Commonwealth Bank, which has more than 1.5 million mortgage customers, has notified borrowers of coming changes to their repayments and redraw balances, with some beginning as early as this week.

CBA will automatically reduce minimum repayments for customers who get ahead on their mortgage, which will slow down the rate they pay off their mortgage – but it will not extend the loan term beyond 30 years.

The bank will also automatically reduce minimum repayments for customers if their interest rate falls.

The only customers unaffected are those who have set their home loan repayments above the minimum.

Customers who want their regular repayments to remain at the original level will have to “opt in” by manually increasing direct debits.

A CBA spokeswoman said the charges will provide more “flexibility” to customers.

RateCity spokeswoman Sally Tindall, “it’s disappointing to see a bank make this kind of decision at the start of a Royal Commission.”

She said the move would see many customers shell out thousands in extra interest.

The move falls in line with many other lenders.