The new offering, Unloan, is a digital-only home loan product that offers a discount that increases every year, for up to 30 years, and allows customers to complete the application within 10 minutes

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A Commonwealth Bank branch office in Sydney. (Credit: Maksym Kozlenko/Wikipedia)

Commonwealth Bank of Australia (CBA) has rolled out a new digital home loan product, Unloan, which comes with a discount increasing every year for up to 30 years.

Unloan provides a low variable rate to owner-occupiers, priced at 2.14% per annum (p.a.), including a loyalty discount that increases by 0.01% p.a. every year, up to 30 years.

It also offers a low variable rate of 2.44% p.a. for the investors, along with a loyalty discount that grows at the same rate of 0.01% p.a., up to 30 years.

CBA has created its new home loan product with support from its venture scaler, x15ventures, leveraging its advanced technology, tools and experience.

The bank has developed new cloud-based capabilities to provide lending and payments services to Unloan and is expected to offer downstream compliance and operations services.

CBA CEO Matt Comyn said: “Driving digital innovation for our customers – including the delivery of distinct and differentiated customer experiences – is core to CBA’s ongoing strategy.

“Unloan is a powerful example of what can be achieved by successfully bringing together the pace and innovation of the startup world with the scale and assets of Australia’s leading bank, which has always been central to our approach with x15.”

Unloan is said to eliminate the complexities associated with traditional lending options, by allowing customers to complete the digital application process within 10 minutes.

Unloan is currently accepting the applications to refinance home loans with an upper limit of A$3m ($2.1m) and up to 80% of the property’s value.

The new digital loan product will be expanded to new home loans in a few months, and enable Open Banking-powered assessments for a quick application experience.

Unloan has the potential to grow at a pace of a fintech while benefiting from its back-end banking, payments and compliance services, said CBA.

Unloan CEO Daniel Oertli said: “We believe home loans should be simple to understand, easy to get, and easier to live with. That’s why we built Unloan – a new kind of home loan designed to pass more value back to customers.

“We have a low variable rate, an ever-increasing discount, and an easy online application.”