Powered by MOMENTUM MEDIA
SUBSCRIBE TO OUR NEWSLETTER SIGN UP
Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

ANZ tightens IO lending

anz    anz
Reporter 3 minute read

The major bank has announced that full income verification will be required from clients that wish to switch or refinance to an interest-only option.

As of 5 March 2018, ANZ will regard interest-only (IO) loan renewals as “credit critical events” which require full income verification as part of its measures to streamline the credit critical process.

The requirements are set to apply to loan applications that involve changing from principal and interest (P&I) to IO, or extending an IO term.

Further, if serviceability is not evident, the loan will remain or revert to P&I.

Advertisement
Advertisement

ANZ will update process guides and renewal checklists to include the changes.

Moreover, customers will be notified by ANZ six months prior to the expiry of the IO period, and they will be informed of refinancing options available to them.

The bank noted that it is making the changes to further enhance its lending practices.

“We are making this change as part of our continual enhancements to our lending practices,” the bank said.

“Converting to or extending an interest-only period is a material change to original loan conditions, which could increase the total repayments over the life of the loan.”

PROMOTED CONTENT


Last year, the Australian Prudential Regulation Authority (APRA) imposed restrictions requiring banks to limit interest-only lending to 30 per cent of new loans.

[Related: Brokers should be ‘proactive’ in refinancing IO loans]

 

ANZ tightens IO lending
anz
TheAdviser logo

anz

 

more from the adviser
Alex Brgudac Prospa head of partnerships sets up consultancy business

Alex Brgudac, the head of partnerships at SME lender Prospa, is t...

mortgage payments money FBAA flags home ownership scheme risks

The association has warned brokers about the risks of home owners...

Karlee Butcher Former Westpac banking manager joins AFG

AFG has welcomed a former Westpac business banking manager to its...