ANZ 2022 Full Year Debt Investor Presentation
ANZ 2022 Full Year Debt Investor Presentation
Income & Expenses
Know Your Customer
AUSTRALIA HOME LOANS - UNDERWRITING PRACTICES & POLICY
CHANGES
Multiple checks during origination process
Pre-application²
Application
Underwriting Practices & Policy Changes¹
Aug 2015
Interest rate floor applied to new and existing mortgage lending at 7.25%
Apr 2016
Jun 2017
Income Verification³
Nov 2018
Serviceability
Income Sensitisation
Expense Models
Interest Rate Buffer
Repayment Sensitisation
May 2019
Jul 2019
Quality assurance, info verification & policy reviews
Oct 2019
LVR Policy
Collateral/Valuations
LMI Policy
Feb 2020
Valuations Policy
Credit History
Aug 2020
Credit Assessment
Bureau Checks
Feb 2021
Interest rate floor decreased to 5.10%
Fulfilment
Documentation
Security
Aug 2021
Withdrew Equity Manager product offering
Nov 2021
Increase of interest rate buffer to 3.0%
End-to-end home lending responsibility managed within ANZ
Effective hardship & collections processes
May 2022
•
Full recourse lending
Jun 2022
•
ANZ assessment process across all channels
Introduced Simpler Switch proposition which allowed a more streamlined Home Loan application
Debt to Income ratio restrictions tightened to decline lending greater than 7.5x
Introduction of an income adjusted living expense floor (HEM)
Introduction of a 20% haircut for overtime and commission income
Minimum default housing expense (rent/board) applied to all borrowers not living in their own
home and seeking Investor (or Equity) loans
Enhanced Responsible Lending processes including additional enquiry regarding expenses and
increase in minimum monthly credit card expense
Introduced the break down of borrowers' living expenses (subsequently increased from 14
categories to 22 in Sep 2020)
Increase of interest rate buffer to 2.50% and reduction of interest rate floor to 5.50% (replacing the
7.25% APRA floor)
Introduced Debt to Income restrictions to decline lending greater than 9x DTI
Introduced a residential rental income yield cap at 7% of the security value
Interest rate floor decreased to 5.25%
Introduced investment income yield caps: interest income capped at 3% and dividend income
capped at 6%
Withdrew Low Doc lending
Additional Debt to Income restrictions requiring manual assessment where DTI is between 7x and 9x
3.
4.
Introducing a streamlined refinance process for a segment applications eligible for the simpler switch proposition
The HEM benchmark is developed by the Melbourne Institute of Applied Economic and Social Research ('Melbourne Institute'), based on a survey of the spending habits of Australian families
1.
2.
2015 to 2022 material changes to lending standards and underwriting, excludes temporary COVID related policies
Customers have the ability to assess their capacity to borrow on ANZ tools
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