The non-major has announced that it is revising its maximum acceptable debt-to-income measure for high loan-to-value ratio loans and those involving equity release or cash-out loan purposes.
Macquarie Bank said the changes have been reflected in the updated serviceability calculator, effective from 17 February.
The changes include:
- Where the LVR is greater than 80 per cent, a maximum DTI ratio of six will apply;
- At all LVRs where a loan involves equity release or cash out, a maximum DTI of six will apply.
Macquarie Bank noted the following exceptions to the second policy:
- Purchase of another property where contract of sale is available or the application is accompanied by a second pre-approval application;
- Construction of new property where building contract or building plans/specifications are available; and
- Separation/divorce situations where there is a formal separation agreement.
The bank’s servicing calculator will calculate the DTI.
In an update to brokers, the bank urged brokers to check the DTI before submitting loan applications.
If the DTI is greater than six, brokers may need to 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 bank has also incorporated the latest household expenditure measure in the serviceability calculator update.
The non-major bank announced revisions to DTI measures in October last year, citing record-low interest rates as a reason.
Macquarie Bank had stipulated then that where the LVR is greater than 70 per cent and the loan purpose includes an equity release/cash-out, a maximum DTI ratio of six applies.
[Related: Banks relax valuation policies]