CBA CEO Matt Comyn sounds alarm on soaring home loans and interest rates, urges government to rein in big tech

Commonwealth Bank of Australia chief executive Matt Comyn warned Australians are taking on too much mortgage debt and should prepare themselves for no interest rate cuts over the next 12 months.

The head of Australia’s biggest bank also urged politicians to protect Australian sovereignty and push back against US technology giants competing in banking, media and internet services.

Mr Comyn told a parliamentary committee his bank’s home loan credit growth was around 6 per cent or slightly more for investors over the most recent quarter, reflecting record prices in October, a rate of borrowing so greater it could threaten the economy.

“Obviously we benefit as an institution where housing credit is higher, but for long-term financial stability, for equality and access to the housing market... I think that’s probably pushing a higher level than regulators might be ultimately comfortable with,” he told the House of Representatives economics committee. “A more sustainable growth in housing credit would be below the current level.”

He said he did not expect interest rates to fall much further from their current level of 3.6 per cent, which he said might slow mortgage borrowing.

“It will be interesting to see whether there’s some moderation to the demand side of housing given there is I think with good reason much less confidence that (interest) rates will be reducing anytime soon,” he said.

Later in response to a question from MP Henry Pike, the member for Bowman, over the direction of rates, Mr Comyn said that interest rate forecasting is a difficult game. “But to your answer question directly. No, I don’t think a cash rate reduction in 2026 is likely.”

The bank boss also talked around questions from MP Jerome Laxale, suggesting that young people who took mortgages using just a 5 per cent deposit would be, perhaps unfairly, subject to higher total interest payments over the life of a loan and more vulnerable to default.

“It’s true that the more you borrow, the more you’ll pay back,” said Mr Comyn. “But the reality is when you look at loss rates over multiple decades, it’s heavily causal to change in employment circumstances. Then secondarily it tends to be related to personal illness, and then thirdly relationship breakdowns can cause financial difficulty.”

Payments reform, pushing back against big tech

Mr Comyn also used the parliamentary session to again argue that lawmakers should challenge the rise of mega-cap US tech businesses that often pay little to zero tax on their revenues earned in Australia.

“It’s certainly not just limited to payments,” he said. “We see this in many industries, like the media and telcos. Netflix for example, I’m a subscriber, I can’t remember their total (Australian) revenue, I think it’s more than $10 billion but I don’t think they pay $1 of tax.

“As a point of principle in terms of the sovereignty of Australia, I have a clear view that the legal and regulatory playing field should be level, so that everyone participate and operates here by the same laws and makes certainly a proportionate and fair contribution.”

Currently, the Reserve Bank is looking at plans to ban the surcharging of consumers when they use cards to pay for goods and services in industries such as hospitality at the point of sale.

The proposed changes have left banks like CBA and their payments rivals Apple Pay, Visa, and Mastercard fighting in terms of who should wear any costs associated with lost fees from a fee ban.

“If you’re going to try and transfer $1 billion of revenue from an (payments) industry taking it solely from the domestic institutions and in a way that favours international I don’t think it’s consistent with some of the things I’ve touched on,” Mr Comyn said.

Definition of value destructive

The boss of Australia’s largest lender also used his opening address to suggest regulatory rules that require banks to keep a fixed amount of idle capital in reserve to cover bad debts are too onerous, harming competition, and his bank’s own financial performance to the detriment of shareholders.

“Every time we make a loan, we have to set aside capital for expected and unexpected losses,” said Mr Comyn. “There’s only two sources for that (capital). You either have to generate profit as an institution, or you have to ask for that money from shareholders and investors.”

Mr Comyn also pointed to overseas banks pulling out of the home loan lending market in Australia as evidence that the profitability isn’t sufficient on loans due to the strictness of regulations requiring banks to keep capital as a buffer in reserve.

”Returns across many financial institutions are sub cost of capital,” he said. “That’s the definition of value destructive. It’s also very hard for banks when they are not earning their cost of capital to be able to lend.”

As an example he added that current capital adequacy requirements enforced by banking regulator APRA mean CBA must hold $15,000 in idle capital in reserve against a a standard $500,000 home loan. If the loan becomes classified as at high risk of default then CBA needs to hold $100,000 in reserve against its $1 million value.

The more capital banks must hold idly in reserve, the lower their profitability as defined by key metrics such as return on equity.

CBA shares fetched $153.20 on Tuesday lunchtime and have now erased all their gains for 2025.