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Macquarie Bank revises serviceability policy

by Malavika Santhebennur10 minute read

The non-major bank has announced changes to its serviceability policy in response to record-low interest rates.

Macquarie Bank has announced it is revising its debt to income (DTI) measure to ensure clients’ overall level of debt continues to be assessed suitably in light of the current low interest rate environment.

The bank announced that its serviceability calculator will now display a DTI measure.

Macquarie Bank also said that where the loan-to-value ratio (LVR) is greater than 70 per cent and the loan purpose includes an equity release/cash out, a maximum DTI ratio of six applies.


“For loan applications involving an equity release/cash out and where the LVR is greater than 70 per cent, please remember to check the DTI,” the bank said.

If the DTI is greater than six, mortgage brokers will need to either include additional verifiable income or reduce the amount of equity release/cash out to bring the DTI to less than or equal to six.

The changes came into effect on 17 October.

For applications that are in progress, the bank said any applications submitted before 17 October and formally approved prior to 2 November will be assessed according to the existing policy.

Westpac recently revised its home lending policy, including the way it calculates income and expenses using the Household Expenditure Measure benchmark.

It also introduced a new DTI ratio and referral rule, and stated that where total liabilities are seven or more times higher than total gross income, the application will now be automatically reviewed by a credit assessment officer.

The Reserve Bank of Australia cut the official cash rate to 0.75 per cent earlier this month, after lowering rates in June and July. The cash rate was slashed by a cumulative 75 bps over the past five months.

[Related: Heritage Bank drops floor rate]

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Malavika Santhebennur


Malavika Santhebennur is a content specialist at Momentum Media, focusing on mortgages and finance writing.

Before joining Momentum Media in 2019, Malavika held roles with Money Management and Benchmark Media, where she was writing about financial services.

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