CBA Profit Rises as Mortgage Applications Plunge 15%

Australia's largest home lender posts a $10.9 billion profit but reveals a steep slide in loan applications since the May federal budget.

Australia's biggest home lender has posted a 7 per cent rise in full-year profit to $10.87 billion — but beneath the headline figure sits a housing market under genuine pressure. The Commonwealth Bank's home loan application volumes fell 15 per cent following the May federal budget, with investors pulling back sharply as the broader market adjusted to three consecutive interest rate rises earlier this year.

The bank's FY26 results, released on 12 August 2026, provide one of the most detailed real-time reads on where the Australian mortgage market currently stands.

The Numbers That Matter for Borrowers

The most immediate takeaway from CBA's results is the scale of the slowdown in mortgage demand. Since the May federal budget, overall application volumes are down 15 per cent — but that aggregate masks a much wider divide between investor and owner-occupier borrowers.

Investor loan applications have fallen 28 per cent since the budget, which contained sweeping changes to property investment taxation, including restricting negative gearing to newly built properties and replacing the 50 per cent capital gains tax discount with an inflation indexation model. Owner-occupier applications, which were not directly targeted by the tax changes, fell by a comparatively modest 9 per cent over the same period.

ABC News reports that other major lenders are seeing similar conditions: Westpac has recorded a 20 per cent fall in applications since May, and NAB flagged a 15 per cent decline since the end of March.

CBA's total mortgage balances reached $680 billion at June 2026, up from $634 billion a year earlier, including its Bankwest portfolio. New home loan fundings totalled $95 billion for the full year, up from $85 billion in FY25, and the average new loan size rose to $503,000 from $490,000. Growth in the second half slowed to 3.1 per cent, slightly below the system growth rate of 3.3 per cent.

CEO Matt Comyn said the softer market was a direct consequence of policy settings designed to cool housing activity. "There are consequences of less housing growth, and we have just got to accept that," he said. Application volumes appeared to have troughed in late June, with Comyn pointing to early signs of stabilisation in the first week of August.

Broker Share Rises as Direct Channels Slip

One of the more notable details in the CBA results is the continued rise of the broker channel. Broker-originated loans accounted for 49 per cent of CBA's new home lending in FY26, up from 46 per cent a year earlier — even as the bank's stated multi-year strategy favours its proprietary direct channel.

MPA Australia reports that the shift was sharper within the financial year itself. Broker-originated loans rose from 33 per cent of new fundings in the first half of FY26 to 36 per cent in the second half, marking the first meaningful uptick in broker volumes at the bank after several years of share erosion.

CBA continues to note that proprietary-originated home loans remain 20 to 30 per cent more profitable than broker-written loans once commissions are accounted for, but the market is sending its own message: in a more complex lending environment, borrowers increasingly turn to brokers. For those navigating today's market, accessing an independent home loan comparison across multiple lenders is worth the effort.

Arrears Edging Higher — But Buffers Remain Solid

The results flagged early signs of credit pressure in the mortgage portfolio, though the bank's overall assessment was measured. Home loan arrears of 90 days or more rose to 0.73 per cent at June 2026, while 30-day-plus arrears reached 1.33 per cent. Loan impairment expenses rose 8.5 per cent to $788 million for the full year and were 47 per cent higher than in the first half.

Despite those moves, 35 per cent of CBA mortgage customers were at least two years ahead on their repayments at June 2026, and a further 8 per cent were between one and two years ahead. Negative equity remained low at 0.5 per cent of the portfolio. Non-performing home loans were concentrated in Victoria, which accounted for 53 per cent of the total, and New South Wales at 33 per cent.

CBA's minimum serviceability assessment floor rose to 11.80 per cent at June 2026 from 11.30 per cent a year earlier — meaning banks are now stress-testing borrowers at a materially higher rate than in previous years.

What the Bank Expects from Here

CBA is currently forecasting the cash rate will remain on hold at 4.35 per cent for the rest of 2026, before "a couple of cuts" in 2027. Comyn said he expected some buyers to return to the market in anticipation of those lower rates. Fixed-rate lending showed a modest uptick in the second half, rising to 7 per cent of new fundings from just 1 per cent in the first half of FY26, suggesting a growing subset of borrowers are seeking repayment certainty.

For existing variable-rate borrowers, this is a useful moment to check whether your current rate is still competitive. Our refinance savings calculator can show what switching to a better rate could mean for your monthly repayments.

If you are an investor reassessing your portfolio in the wake of the budget's tax changes, understanding your current borrowing power under today's serviceability floors is a practical starting point — CBA's assessment floor alone rose by 50 basis points over the year.

For those still working towards a first purchase, softer demand and falling prices in some markets are creating windows worth watching. Our first home buyer guide covers what is currently available and how to assess your options.

CBA's final dividend for FY26 was $2.70 per share, fully franked, taking the total annual payout to $5.05 — up 4 per cent on the prior year. For the full story, see ABC News.