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MyState, Heritage tighten risk appetites

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Reporter 5 minute read

The non-majors have joined several lenders in revising their credit risk appetites in response to credit quality concerns from the coronavirus outbreak.

MyState Bank and Heritage Bank have announced changes to their lending policies, joining ME Bank and several non-bank lenders in lowering their risk appetites for borrowers most affected by the COVID-19 outbreak.


The Tasmania-based lender has informed brokers that while it would continue to lend to applicants employed in industries most impacted by the coronavirus, it would no longer accept the use of such income for serviceability assessments.


The industries cited by MyState include tourism and travel-related services, hospitality and accommodation, event planning, entertainment, retail sales sector, real estate services and manufacturing industries.  

MyState also announced that it would reduce acceptable income from commissions, overtime and bonuses from a maximum of 80 per cent to 50 per cent.

It added that income from dividends would no longer be accepted for serviceability assessments.

The lender noted that it would verify employment for all applications.

MyState’s changes are effective for new applications received from Monday, 6 April.



Heritage Bank has also announced a number of changes to its credit policy, effective from Monday, 6 April.

Heritage tightened serviceability requirements across a range of income types, including dividends (100 per cent to 80 per cent), site and shift allowance (100 per cent to 80 per cent), casual income (100 per cent to 50 per cent), overtime income (50 per cent) and commissions and bonuses (100 per cent to 50 per cent). 

Heritage also revealed that it would no longer accept verbal verification for employment and income with the exception of “second job income” for casual workers employed for less than 12 months and for applicants with lender’s mortgage insurance.

Conversely, Heritage announced that it would now accept 100 per cent of interest income, expand the rental income category to include body corporate, and broaden child support income to private arrangements approved by child support agencies.

MyState and Heritage join the likes of La Trobe Financial, ME Bank, Bluestone, Latitude and Pepper Money in revising their risks appetites in response to recent changes in market conditions.

[Related: Lenders sharpen focus on serviceability]

MyState, Heritage tighten risk appetites
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