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Investor Presentaiton

HOUSING LENDING PRACTICES & REQUIREMENTS KEY ORIGINATION REQUIREMENTS Income Household expenses • Income verified using a variety of documents including payslips and/or checks on salary credits into customers' accounts • 20% shading applies to less certain incomes (temporarily increased to 30% in May 2020, reduced back to 20% in November 2020) Assessed using the greater of: • • Customers' declared living expenses, enhanced in 2016 to break down into granular sub categories Household Expenditure Measure (HEM) benchmark plus specific customer declared expenses (e.g. private school fees). HEM is adjusted by income and household size LOAN-TO-VALUE RATIO (LVR) LIMITS Principal & Interest - Owner Occupier Principal & Interest - Investor Interest Only Owner Occupier Interest Only - Investor 95% 90% 80% 90% 80% 'High risk' postcodes (e.g. mining towns) 70% 'At risk' postcodes OTHER REQUIREMENTS 68 Serviceability . Assess customers' ability to repay based on the higher of the customer rate plus serviceability buffer (2.5%) or the floor rate (4.95%) . Loan-to-Income decline threshold of 7x Debt-to-Income decline threshold of 9x • Lenders' mortgage insurance (LMI) applicable for majority of lending >80% LVR Existing debt • • Assess Interest Only loans on the full remaining Principal and Interest term Verify using declared loan statements and assess on the higher of the customer rate plus serviceability buffer (2.5%) or the floor rate (4.95%) • Assessment of customer credit cards assuming repayments of 3.8% per month of the limit Assessment of customer overdrafts assuming repayments of 3.8% per month of the limit • LMI for inner city investment housing >70% LVR Apartment size to be 50 square metres or greater (including balconies and car park) NAB Broker applications assessed centrally – verification and credit decisioning Maximum Interest Only term for Owner Occupier borrowers of 5 years National Australia Bank
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