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Big four bank hungry for investor loans

by Francesca Krakue11 minute read
Big four bank hungry for investor loans

One major lender has reinforced its bullish stance on investor home loans, launching a new offering just days after CBA revealed that it is tightening its credit criteria.

In a memo to its brokers on Monday, ANZ said: “As the market continues to change and evolve, we thought it best to communicate with you to reinforce that ANZ continues to accept both owner-occupier and investor borrower applications.”

“We remain committed to supporting our brokers and are accepting both new and refinanced home loan applications in line with our current policies.”

As such, ANZ reminded brokers that it has extended its switching discretion, which is available for its brokers to offer their customers, up to $1,200 for new home or residential investment loans refinanced to ANZ under ‘Breakfree’ until 30 April 2017.


“This switching offer is subject to eligibility criteria and is for a limited time,” the bank added.

The memo comes after Bankwest confirmed on Monday that its serviceability calculators have been updated to remove negative gearing tax benefits for customers who operate their investment property at a loss.

The subsidiary of CBA previously revealed that it would no longer accept applications from new customers seeking to refinance their stand-alone investment lending from other financial institutions.

CBA followed suit soon after, telling its mortgage brokers last week that it will be suspending the acceptance of new refinance applications for investment home loans “until further notice”. APRA’s latest Monthly Banking Statistics show that CBA has the highest rate of growth in its investor home loans, with its portfolio having grown by 7.2 per cent to $137.3 billion over the 12 months to 31 December 2016.

Westpac has the largest investor lending portfolio of the big four, growing its book by 5.1 per cent to $142.2 billion over the 12 months.

Meanwhile, APRA’s statistics show that ANZ has the smallest investor loan book of the majors at $81.4 billion, down 1.7 per cent over the 12 months to 31 December 2016. ANZ was the only major to reduce the size of its investor loan book over the year.

Similarly, NAB’s investor loan book grew by only 4.3 per cent over the year to just over $100 billion.

NAB Broker general manager Steve Kane confirmed that the major bank has no immediate plan to pull back on investor lending, commenting: “We are absolutely committed to continuous improvement to ensure we offer a compelling proposition for brokers and their customers.”

“NAB is open for business for both owner-occupier and investor borrowers, and is accepting all new business and refinances in line with our policies. We have not altered our policies, so business with NAB continues as usual.”

ANZ boss bullish on brokers

ANZ’s choice to send a memo to its brokers, and its commitment to supporting them, is unsurprising considering the bank’s chief executive officer Shayne Elliott previously explained the significance of the third-party channel to the group’s home lending business.

Mr Elliott told The Adviser last year that one of the main reasons the channel continues to be a focus for the bank is because its customers choose to use brokers.

“Our customer base in Australia feels brokers are a good way to look at the market overall and make the best decision, so there is demand for it,” Mr Elliott told The Adviser.

“Secondly, for ANZ what we find is that brokers are a terrific way to acquire new customers. Somebody who is not already an existing customer of ANZ is unlikely just to wander into a branch or call up the call centre and ask about a mortgage. But they do talk to brokers.”

[Related: Broker originated loans on the rise for major bank