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Adelaide Bank changes residential lending policies

residential rent    residential rent
Reporter 4 minute read

Effective from 18 October, Adelaide Bank has reduced the time frame for off-the-plan valuations, added an additional commitment to its serviceability ratio and tweaked its policy for apartments.

The following policy changes will impact applications submitted to the bank received “after close of business” Wednesday, 18 October:

Valuation time frame change

The time frame in which the bank will accept valuations for off-the-plan purchases will reduce from six months to three months.


This change has been made “to better reflect the risk attached to these purchases and to align the time frame with policy on acceptance of applications and Valuers PI cover”.

Calculation of serviceability ratio

An additional commitment has been added to the calculation of serviceability ratio, whereby the minimum notional rent expense of $150 per week ($650 per month) must be included where the board/rent commitment will continue after settlement of the loan.

The bank has said that this will apply even if the applicant has advised that their rent or board is less than this amount or is zero due to living arrangements with friends or relatives.

This change has been made “to ensure that if [borrower] living arrangements change, they can continue to support themselves without undue hardship”.


High-density units/apartments

Following a review, Adelaide Bank has revealed that this policy has been updated to “provide further definition to minimum requirements”.

These definitions include:

  1. The definition of high density is: “complexes with more than 50 units/apartments or more than five storeys (excluding car parking)”.
  2. Units must also have the following attributes:
  • Every habitable room (bedroom/s and living room/s) must have a window
  • A separate bathroom
  • A kitchen (shared or communal kitchen not acceptable), and
  • Laundry facilities (shared or communal facilities not acceptable)
  1. The minimum apartment size has been changed from <40 square metres so that those with:
  • one bedroom must be <50 square metres
  • apartments with two (or more) bedrooms must be <60 square metres

Any applications received from this evening must meet new supporting documentation requirements.

Any applications currently in the pipeline and seeking formal approval will be exempt from the new policy requirements.

The new changes cover applications submitted to the bank up to close of business Wednesday, 18 October 2017.

[Related: Adelaide Bank rolls out construction lending to brokers]

Adelaide Bank changes residential lending policies
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