Australia's largest home lender says applying for a mortgage has become harder but there should not be much impact on the maximum amount people can borrow.

Commonwealth Bank CEO Matt Comyn said he does not expect the supply of credit will be a big constraint going forward amid tighter lending standards.

Lenders have stepped up their checking of home buyers' living expenses, reducing their reliance on a benchmark household expenditure measure and pleasing the banking regulator and the financial services royal commission in the process.

Mr Comyn said there was a much greater focus on very granular expense verification.

"For an individual borrower who's going through an application process today versus five years ago, it would feel like a more rigorous experience," he said on Wednesday.

"You hear brokers who would say the interview is taking a lot longer to actually complete, to get the information that the bank requires.

"I think that's a prudent application of the existing responsible lending laws."

Mr Comyn did not expect the increased scrutiny to have an impact on maximum borrowing capacity, which he estimated fell by 15 to 25 per cent between 2015 and 2017 amid regulator-imposed measures to strengthen mortgage lending standards.

He noted more than 90 per cent of home buyers did not borrow the maximum amount.

Customers have been switching from investor and interest-only mortgages to cheaper owner-occupier and principal-and-interest loans as banks tighten lending standards and raise the cost of riskier loans in response to regulatory intervention and the harsh light of the royal commission.

"The housing market transition is a rational outcome of the lending policy changes introduced over a number of years, especially following an extended period of outpaced growth in some markets," Mr Comyn said.

Royal commissioner Kenneth Hayne QC decided not to tighten lending laws or impose a cap or ban on the use of the expenses benchmark, pointing to the steps banks have taken to strengthen their home lending practices and reduce their reliance on the HEM.

Reserve Bank governor Philip Lowe said the commission's recommendations were balanced and sensible, and should remove some uncertainty over the supply of credit.

He said the tightening of credit standards over recent years was needed, but the right balance had to be struck.

"As lenders have sought to find that balance, we have had some concerns that the pendulum may have swung too far the other way, especially for small business."