SYDNEY, April 15 (Reuters) - Commonwealth Bank of Australia (CBA), the country's largest lender, expects to grow its $378 billion home loan book by about 5% this year, leading to increased mortgage profit of about 3%, Chief Executive Officer Matt Comyn said on Thursday.

Strong economic recovery from the COVID-19 pandemic fuelled by the near-zero cost of money, paired with a "miraculous" turnaround in the labour market, will likely push record house prices even higher, Comyn also said at a biannual parliamentary questioning of the heads of Australia's four biggest banks.

Job creation in March outstripped expectations with unemployment falling to 5.6% from a recent peak of 7.5% in July when pandemic lockdown measures tipped the economy into recession, government data showed on Thursday.

"We're anticipating credit growth of about 5% over the course of the year," Comyn said. "I would say our forecast for housing ... it's probably closer to 10% at this particular point in time."

Asked whether such an increase in its home loan book would lead to an equivalent rise in profit, Comyn said factors such as bad debt and price-based competition meant profit would be slightly lower. Pressed on whether that meant a 3% increase, Comyn said, "It could be in that order."

"We've also seen the highest level of refinancing, in the market, that I think we've ever seen," he said, adding that business lending growth, however, would be much lower.

While official interest rates dropped to a record low of 0.1% last year, major banks protected profit margins by not passing on the cuts to the majority of customers with variable mortgages, and instead lowered rates on fixed-rate loans.

That dynamic led many customers to refinance mortgages to secure cheaper debt.

CBA is the biggest of Australia's Big Four banks by assets, followed by Westpac Banking Corp, Australia and New Zealand Banking Group Ltd and National Australia Bank Ltd. Together, they command the majority of the country's A$1.8 trillion ($1.39 trillion) housing loan market.

Comyn's appearance will be followed on Thursday afternoon by Westpac CEO Peter King.

($1 = 1.2925 Australian dollars) (Reporting by Paulina Duran in Sydney; Editing by Christopher Cushing)