Banking giant’s new mortgage product offers generous bonuses – and it’s not available to brokers or lenders
Commonwealth Bank’s general manager third party banking Baber Zaka has framed an eye-catching new Qantas tie-in as just one of a multitude of brokered and non-brokered mortgage products offered by the lending giant.
Announced nearly a month ago, The Qantas points deal – which is only available directly through CBA’s Digi Home Loan, not brokers or lenders – dishes out handsome bonuses as an incentive to take out a digital home loan.
Until 30 November, borrowers who submit an application can receive:
- 100,000 Qantas Points for loans between $300,000 and $499,999
- 200,000 Qantas Points for loans between $500,000 and $999,999
- 300,000 Qantas Points for loans of $1,000,000 or more.
As of Monday, 29 September, the Digi Home Loan had a variable interest rate of 5.34% for new borrowings on an LVR of 60% or less.
The deal has garnered attention in the broking community as CBA digs its heels deeper into the proprietary lending channel.
Brokers originated just 34% of CBA’s mortgage flows in its last financial year, with flows reducing even further to 33% of all originations in the second half. That is compared to an industry-wide average of more than 75%.
Major banks like CBA, ANZ, Westpac and NAB stand to earn higher margins from proprietary lending compared to brokered home loans. This has prompted some of them to boost investments in direct lending as a way to recover lost margins.
In this context, CBA’s new Qantas offer could resemble another step in this direction, although Zaka said the Digi Home Loan will not appeal to everyone.
He said: “At CommBank, we recognise the essential role brokers play in helping Australians achieve home ownership and are committed to sustainably growing our broker flows as part of our broader home lending strategy.
“Our recently launched Qantas Points offer is available through our Digi Home Loan.
“The Digi Home Loan is designed for a specific cohort of customers – those who want a fully digital, self-serve experience with no face-to-face support, and is not available through assisted channels, including CBA lenders.
"By providing a wide variety of home loan options, including through mortgage brokers, we aim to meet the diverse needs of more people."
Digital home loans, i.e. mortgages that can be taken out entirely via an app, remain a niche offering in the Australian mortgage industry. While they are fast and often cheaper, customers overwhelmingly prefer the human expertise that comes with working with a broker or mortgage professional.
What does 300,000 Qantas Points get you?
With 300,000 Qantas Points, two people departing from Sydney could get:
- Return flights to Los Angeles
- Return flights to London
- Return flights to Rome
From Melbourne, two people could get:
- Return flights to Delhi
- Return flights to Los Angeles
From Brisbane, two people could get:
- Return flights to Honolulu
- Return flights to Noumea
