Australian Housing Dynamics and Affordability
AUSTRALIA HOME LOANS
INTEREST ONLY
•
Serviceability assessment is based on ability to repay principal &
interest repayments calculated over the residual term of loan
86% of Interest Only customers have net income >$100k p.a.
(portfolio 66%)
Historical policy & pricing changes have led to a reduction in Interest
Only lending. ANZ's Interest Only flow composition is 11% for 2H19.
Proactive contact strategies are in place to prepare customers for the
change in their repayments ahead of Interest Only expiry
INTEREST ONLY FLOW COMPOSITION
%
APRA's 30% limit removed December 2018
42
38
27
14
13
12
11
2H16
1H17
2H17
1H18
2H18
1H19
2H19
SWITCHING INTEREST ONLY TO P&I AND SCHEDULED INTEREST ONLY TERM EXPIRY1,2
$b
8
4
2
7
7
6
6
3
3
00
8
DYNAMIC LVR PROFILE OF 12 MONTH
FORWARD CONVERSIONS³
%
27
26
18
12
10
7
6
4
3
1H21
2H21
1H22
2H22
1H23+
0-60% 61-75% 76-80% 81-90% 91-95% 95%+
8
8
6
7
1H17
2H17
1H18
Contractual conversions
1H19
2H19
2H18
Early conversions
1H20
2H20
Contractual (still to convert)
1. Total portfolio including new flows 2. As at Sep-19 3. Includes Non Performing Loans and excludes accounts with a security guarantee
ANZ
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