Unloan at a glance:
Commonwealth Bank of Australia has announced the availability of a brand new digital home loan for young buyers – Unloan.
Unloan is part of its latest strategy and investments to ‘reimagine banking’ into the modern world. This debut of Australia’s first digital home loan with a discount that increases every year up to 30 years. Count us intrigued…
What is Unloan?
Unloan is CommBank’s newest home loan offer. Launched in 2022, it is a digital home loan that is built with modern technology, and the entire process is online. The only caveat is that the loan is only available for homeowners who are looking to refinance.
According to Unloan’s CEO, the loan is intended to be easier to get, easier to understand and easier to live with. It is a home loan that can provide tech-savvy homeowners with a fast and simple alternative to traditional mortgages. The application process is estimated to take only 10 minutes online! Unloan does not charge any fees. So you save on application fees, account keeping costs, transaction fees and discharge fees.
However, the best part of Unloan is its extremely competitive interest rates. Owner-occupiers can enjoy a low variable rate, while investors can access a slightly higher interest rate – speak to your broker today to know the current rates on offer.. The icing on the cake is that both owner-occupiers and investors get a loyalty discount of 1 basis point every year for up to 30 years! Unloan also offers its customers the ability to make automated repayments at whatever frequency they desire (e.g. weekly, fortnightly or monthly). However, you can only make principal and interest repayments. Unloan does not offer interest-only repayments.
Unloan works best for refinancing homeowners who want a cost-effective loan that they can easily manage online – provided the amount does not exceed $3 million and 80% LVR.
What makes Unloan unique?
Unloan has some very unique selling points, and the 2 top ones are as follows:
- It is completely online:
- This is a huge thing for a traditional bank like Commbank to offer a loan product that is 100% online, with an application process that is designed to be completed in 10 minutes.
- It is the first home loan with an increasing discount.
- This home loan has been designed to save borrowers the headache of having to refinance every year in search of better interest rates.
How to apply for an Unloan home loan?
Before getting started with a loan application, you might want to read our step-by-step loan application process to get some general tips on what the process is like.
What are the eligibility criteria for Unloan?
To be eligible for Commbank’s Unloan, you have to meet the following criteria:
- Be at least 18 years old.
- Have an Australian passport, or alternately, an Australian state/territory driver’s license.
- Have a credit history that meets Unloan’s policies. If there are issues with your credit history, we suggest you take steps to fix those issues before applying for Unloan.
- Your income must be stable, and you should be able to prove that you can meet your loan repayments.
- You are refinancing an existing home loan up to 80% LVR.
- You have enough money to cover upfront costs such as state mortgage registration fees.
What documents do I need to provide?
To be eligible for Commbank’s Unloan, you have to meet the following criteria:
- Proof of Identification for each person (if it is a joint loan), i.e. driver’s license or passport
- A valid email address and other contact details
- Proof of income such as payslips. If you have other sources of income like rental income, you can also add this to your application.
- If you are self-employed, you will need Your last 6 months of personal bank statements showing that you have been receiving a regular salary from your business.
- Statement of liability showing your other existing loans
- Details of your current home loan
How does the Unloan application work?
- Download the app. (Remember Unloan has its own separate app from CommBank’s main app. You cannot apply for Unloan using the regular Commbank App)
- Add your property
- Add your details. If it is a joint application, add the details of the other borrowers.
- Add all your income (salary, rental income, government income, child support etc.)
- Add your expenses
- Add your liabilities, e.g. existing home loan, credit cards and car loans.
- Set up your loan
- Verify your identity. Unloan uses facial recognition software to verify your identity.
- Upload all the required documents – and you are done!
Advantages of Unloan
Unloan is simple and fast, with an online application process that takes as little as 10 minutes to complete. There is no need to fill in endless paperwork and go to the bank. Unloan is also looking into offering approvals in as little as 10 minutes for the future. Their goal is — apply in 10 minutes to get approved in just under 10 minutes.
And the best bit? There are absolutely no fees attached to Unloan. That means:
- No application fees.
- No transaction fees.
- No account-keeping fees.
- No discharge fees.
- No change fees
- No late payment penalties
- No early termination penalties
- No redraw penalties
Unloan allows you to make extra repayments to pay off your loan faster. It also offers unlimited redraws on those extra payments.
If you are approved for a loan, you will get a discount of 0.01% every year for up to 30 years. Since interest rates are rising, this discount may save you thousands of dollars and the hassle of having to continuously refinance to get the best rate.
You can use AutoPay to change the date, amount and how often you make payments. With Unloan, you can make weekly, fortnightly or monthly repayments.
If you have a joint loan, Unloan gives you access to join-account approvals to make sure each person consents to any changes to the loan.
Disadvantages of Unloan
There are a couple of major disadvantages to using Unloan, including:
- Unloan is only available for homeowners who want to refinance their loans.
- It also has an 80% Loan to Value Ratio (LVR) restriction. This means you cannot borrow more than 80% of your property’s value using the loan system.
- In addition, Unloan does not offer interest-only repayments. So, if you are an investor, you will have to make sure you have enough for both principal and interest repayments.
- The property valuation is automated, which means there is a risk that your property may be undervalued, reducing the amount you can borrow. Automated valuations are usually difficult, if not impossible, to dispute.
- Despite being a CommBank loan, Unloan has its own separate app. So, if you already have a Commbank account, you cannot manage your Unloan using the CommBank app.
Bonus: Frequently Asked Questions
How will Unloan determine my property’s value?
Unloan will digitally assess the value of your property using CommBank’s automated property valuation technology. It is all 100% online.
Can you make extra repayments on an Unloan home loan?
Absolutely! One of the best features of Unloan is that you can make extra repayments on your loan. Unloan does not charge penalties on extra repayments. However, some Terms and Conditions may apply, so it is better to talk to your mortgage broker to make sure there are no caveats.
What about redraw facilities—are they available with Unloan?
Unloan offers an unlimited redraw facility to allow you access to whatever extra repayments you have made on your loan. According to Unloan, there is no minimum or maximum on the number of redraw transactions you can make, and you don’t need any paperwork or forms.
Important: Unloan repayments are processed monthly. So if you make weekly or fortnightly payments, the payments made before the due date will appear as available for redraw. So before withdrawing any money, you must ensure you have enough in the account to meet the next monthly repayment.
Can I use my Commbank App to manage Unloan?
Unloan is not available on the CommBank app. Additionally, you cannot get an Unloan service at CommBank branches or call centres. So even though Unloan is a product of CommBank, it is managed entirely separately from the rest of CommBank.
What if I encounter a problem with my Unloan Application?
If you encounter a problem, you can send a text message or call +61 488 844 877, or you can email [email protected]. An Unloan lending specialist will respond to your query.
Next steps and getting your home loan
Are you looking to refinance? Or do you want to apply for your first home loan? Our team at Hunter Galloway is here to help you buy a home in Brisbane. Unlike other mortgage brokers who are just one-person operations, we have an entire team of experts dedicated to helping make your home loan journey as simple as possible.
If you want to get started, please call on 1300 088 065 or book a free assessment online to see how we can help.
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