Commonwealth Bank's (CBA) worst-case scenario of a 32% drop in house prices assumed a prolonged downturn as a result of the pandemic, with unemployment to hit 9% this year before falling to 6.5% by 2022. 

This scenario also assumed a two year recession, with growth shrinking by 7.1% this year and 0.8% next year, before slightly rebounding by 2.3% in 2022.

A shortened downturn, or V-shaped recovery, would see house prices drop by 'just' 11%, with the unemployment rate marginally better off at the end of the year at 8.25%.

The sharp rebound would see a fall of 6% in growth, rising by the same margin in 2021 and rising again by 3% in 2022. 

However, even in this improved scenario, unemployment would still only fall to 6.5% in 2022.

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

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LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkComparePromoted ProductDisclosure
6.04% p.a.
6.08% p.a.
$3,011
Principal & Interest
Variable
$0
$530
90%
4.6 Star Customer Ratings
  • Available for purchase or refinance, min 10% deposit needed to qualify.
  • No application, ongoing monthly or annual fees.
  • Quick and easy online application process.
Disclosure
5.99% p.a.
5.90% p.a.
$2,995
Principal & Interest
Variable
$0
$0
80%
Apply in minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
 Disclosure
6.09% p.a.
6.11% p.a.
$3,027
Principal & Interest
Variable
$0
$250
60%
  • No annual fees – None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
 Disclosure
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Important Information and Comparison Rate Warning

CBA released the scenarios as part of its March quarter trading update and said it had set aside $1.5 billion to cover potential losses from the COVID-19 recession. 

It said key drivers of the fall in house prices were unemployment, underemployment and changes to income, and uncertainty remained regarding the duration and severity of the COVID-19 impact.

CBA Chief Executive Officer Matt Comyn said in a statement the bank was doing everything it could to support Australia through these challenging times.

"The Bank is well funded, with significant levels of excess liquidity and strong capital," Mr Comyn said.

"The strength of the Bank means we are well placed to support our customers and the broader Australian economy. 

"Today’s announcement of an additional credit provision of $1.5bn for the potential longer term impacts of COVID-19 further reinforces our already strong provisioning and balance sheet settings." 

NAB also said in April house prices could drop by a cumulative 30%, potentially falling by 20.9% in 2020, 11.8% in 2021 before rebounding by 2.5% in 2022. 

ANZ was more optimistic, and said house prices would drop by just 10% nationally, but Sydney and Melbourne would be worse hit, dropping 13%. 

More than 200,000 borrowers ask for loan repayment deferrals 

CBA said it had repayment deferral requests on approximately 144,000 home loans with balances totalling $50 billion, 71,000 business loans with balances totalling over $15 billion, and 25,000 personal loans. 

The bank saw over 1 million calls and online requests for help, with calls to its hardship line increasing by 800% from the start of the pandemic. 

CBA said its controversial move to reduce home loan repayments to the minimum had released up to $3.6 billion to Australian households.

The move was criticised by consumer groups, as the reduction would increase the length of the loan and rack up tens of thousands in additional interest charges. 

CBA also said it had approved more than 6,500 loan applications under the Government's small and medium-sized enterprise Guarantee Scheme, totalling over $500 million of new lending. 

The largest number of applications came from retail trade (18%), followed closely by construction (16%), accomodation, cafes and restaurants (14%), and business services (12%). 



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