CommBank has announced that it will be lowering its serviceability buffer for borrowers looking to refinance their home loans.

Under the changes, CommBank refinancers will be assessed with a 1 percentage point buffer instead of the industry standard of 3 percentage points, provided that they meet the eligibility criteria.

For borrowers refinancing to a loan with a 5.5% p.a. interest rate, they will be assessed at a rate of 6.5%, instead of the 8.5% when the industry standard buffer is applied.

The changes will apply 23 June 2026.

In May, Westpac also rolled out changes to its serviceability rules for refinancers.

The changes also apply to Westpac’s subsidiaries, including St George, Bank of Melbourne, and BankSA.

Rate Money CEO Ryan Gair said it is unfair to subject refinancers to the same rules.

“APRA should have separate recommendations to regulate existing borrowers — it could remove the buffer and allow a dollar-for-dollar refinancing,” he said.

“This recognises that existing borrowers have already proven they can service their loans and allow them to free up some of their money by refinancing to a loan with a lower rate.”

However, APRA recently reminded banks to ensure prudence especially in any changes to serviceability rules.

In a letter addressed to all authorised deposit-taking institutions, APRA said any changes to the serviceability rules to accommodate refinancers must still follow the core intent of its guidance on credit risk management.

“The serviceability buffer provides a contingency for rises in interest rates over the life of the loan, as well as for any unforeseen changes in a borrower’s income or expenses,” APRA said.

“With the potential for interest rates to rise further, inflation still high and the possibility of weaker labour market outcomes, the buffer is an important risk mitigant.”

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