Comyn culls mortgages
Matt Comyn's simplification agenda is reaching into the product design and strategic marketing areas of the Commonwealth Bank, with the company preparing to cull its range of mortgages sold to Australian borrowers.CBA notified brokers this week that it will cease marketing six mortgage products from 29 September as part of a program to streamline marketing.The rationalisation of the home loan product set is the first of a several product culls expected to flow from a review of products and services within the retail banking division.Six mortgage lines, including the once popular "no fee variable rate" home loan, will be withdrawn.Here's a list of the other products earmarked for binning:• 1 year guaranteed rate home loan;• 7 year fixed rate;• 12 month discounted variable rate;• Rate saver; and• 3 year special rate saver.Banking Day understands the bank plans to continue servicing borrowers holding these obsolescent loans rather than invoke a product migration program as occurred at National Australia Bank earlier this year when it terminated its Homeplus-branded mortgage line.While the headline pricing of the "no fee variable rate" loan at 4.52 per cent appears to make it more expensive than some other CBA variable mortgages, it ranks as a competitive product on a comparison rate benchmark.The no fee product's comparison rate is also 4.52 per cent, which makes it cheaper than most of the bank's Economiser-branded loans that will continue to be marketed to borrowers.According to Canstar, the Economiser P&I variable rate product has a headline rate of 4.76 per cent. Its comparison rate is measured at 4.91 per cent.The withdrawal of the 7-year fixed rate product is not surprising given it is one of the most expensive fixed rate offers in the market. It is currently priced at 7.74 per cent.Demand for long-tail fixed rate mortgages has withered in recent years as variable rates have stayed at historically low levels.