Mortgage in just 10 minutes at CBA

The Commonwealth Bank will aim to approve home loans within 10 minutes of customers ­applying online, using a landmark fast-tracking digital loan service.

Commonwealth Bank CEO Matt Comyn. Picture: Adam Yip

The Commonwealth Bank will aim to approve home loans within 10 minutes of customers ­applying online, using a landmark fast-tracking digital loan service announced on Tuesday.

The bank heralded the new digital loan – called Unloan – as a gamechanger in how home loans are approved in Australia. Unloan lets customers apply for a loan as quickly as they might post a group of family photos on social media. They won’t need a broker or hold discussions with bank officials. They do it all on their laptop.

Unloan chief executive Daniel Oertli said initially Unloan applications would be assessed by a team with the aim of a same-day decision. By year’s end, the bank aims to use open banking technology to automatically ­approve “a good proportion of those applications” within a 10-minute period.

With open banking, customers give a bank permission to connect to their transaction data in different banking, mortgage and personal loan accounts. The bank’s computers can very quickly read the data and assess whether a potential borrower meets their lending criteria.

“As a bank customer, you will be able to ask that your data be sent to accredited businesses which may be other authorised banks, financial institutions and organisations,” says an explanation of open banking by the Australian Banking Association.

Financial institutions were given until February 1 this year to make full data transfers available to consumers.

To apply for an Unloan, customers select a property, nominate borrowers, add income details, expenses, loans, credit cards and other ­liabilities, and verify their identity with face recognition. They upload their income documents, and they’re done.

Commbank on Tuesday said Unloan already was live. It estimates that the six steps of the online application process will take as little as 10 minutes.

Commbank announced sweeteners such as no fees, and a loyalty interest rate discount that grows by 0.01 per cent every year, up to 30 years. The cheaper rate could save customers tens of thousands of dollars over the loan duration. To keep things simple, there are only two interest rates – 2.14 per cent for owner-occupiers, 2.44 per cent for investors under current variable rates.

Commonwealth Bank CEO Matt Comyn said the digital loan facility brought together “the pace and innovation of the start-up world with the scale and ­assets of Australia’s leading bank”. He acknowledged Unloan might not suit some borrowers whose circumstances were more complicated.

Mr Oertli promised no waiting fees, no transaction fees, no account keeping fees. The new no-fees home loan facility would be available only online.

“We’re accepting appli­cations for refinancing home loans up to $3m and up to 80 per cent of the property’s value. We’re super excited. We cannot wait to start helping more Australians to pay off their home sooner,” he said.

The bank announced other moves to promote its services to a wider audience.

The new Kit app opens up banking to children, who can manage their earnings, savings and spending. They can receive regular payments from grown-ups for completing chores, set payment goals, access their money through an ATM, and tap their card to make purchases.

The bank also announced that CommSec investing and the CommSec Pocket beginners stock investment app would be available from within the Commbank app, to simplify ­accessibility. Users would still need to maintain a CommSec trading account.

Commbank launched a rewards app called Yello that ­offers discounts, cash backs and additional services, along with software to facilitate eCommerce and payments in hospitality and health, as it continues its drive to be a one-stop shop for commercial customers in different market segments. It plans 20 apps by Christmas.