Major bank broadens rewards scheme, but expert says home loan borrowers may find better rates elsewhere
Commonwealth Bank has announced a revamp of its CommBank Yello loyalty program, effective 1 October, aimed at encouraging customers to consolidate more of their financial products with the bank, including home loans.
Under the updated program, customers will be able to earn rewards points on home loans, among other products. Eligibility requires customers to hold a qualifying transaction account and make at least five transactions per month, among other criteria. The rate at which points are earned will depend, in part, on the number of banking products held with CBA.
"For the first time, more than nine million of our customers can earn points on the everyday banking they're already doing - their home loan, savings, insurance and cards - and redeem them on the things that matter, from groceries, utility bills and fuel through to a well-earned holiday," said Angus Sullivan, Commonwealth Bank group executive of retail banking services. "At a time when every dollar counts, that's value we're putting back in our customers' pockets."
Despite the expanded rewards offering for home loan customers, rate comparisons raise questions about the overall value proposition. CBA's lowest owner-occupier home loan rate currently stands at 6.09%, yet Canstar.com.au data shows 60 lenders offer at least one rate below that figure.
"CBA has spent decades building customer loyalty and the overhaul of Yello is the latest attempt to make that loyalty even stickier," said Sally Tindall (pictured right), data insights director at Canstar.com.au. "However, the devil will be in the details. Earning points on a wider range of banking products might sound appealing, but customers shouldn't assume this will automatically mean they're going to get a better deal."
Tindall warned that if the prospect of earning more points steers borrowers toward a less competitive home loan rate, the financial outcome could work against them. "If you're getting a perk for something you would have taken out anyway, rewards points can be a genuine bonus," she said. "However, if the lure of more points is influencing your decision-making process and you end up spending more or opting for a less competitive rate, the maths could quickly work against you."
Market share and loyalty strategy
CBA holds the largest share of Australian home loans among authorised deposit-taking institutions. According to the latest APRA data, it accounts for approximately 25% of home loans held by ADIs — a position built, in part, through decades of customer loyalty initiatives stretching back to its Dollarmites school banking program.
| Lender | Amount | Market share | Monthly change | Year-on-year change |
|---|---|---|---|---|
| CBA | $635.5 billion | 25% | +0.8% | +7% |
| Westpac | $517.6 billion | 21% | +0.5% | +6% |
| NAB | $351.5 billion | 14% | +0.5% | +5% |
| ANZ | $330.9 billion | 13% | +1.0% | +4% |
| Macquarie | $183.7 billion | 7% | +1.9% | +27% |
| All ADIs | $2.51 trillion | 100% | +0.7% | +7% |
The Yello revamp represents the latest effort to deepen that loyalty, with the bank now tying home loan customers more directly into its broader rewards ecosystem.
Tindall cautioned borrowers against prioritising convenience over competition when selecting a home loan. "While a one-stop shop can feel convenient, that convenience usually comes at a cost," she pointed out. "If you're looking for competitive rates and lower fees, it is well worth shopping around beyond the four walls of your main bank."
She added that managing accounts across multiple lenders has become increasingly straightforward. "Technology has made switching and managing accounts easier than ever," Tindall said. "If keeping your money with the best providers for your finances simply means having an extra app or two on your phone, so be it."
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