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ANZ updates lending policy for self-employed borrowers

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The major bank has rolled out a series of changes to its mortgage policies to make it easier for self-employed borrowers to secure a home loan.

Australia and New Zealand Banking Group Limited (ANZ) has tweaked its Business Owner Home Owner policy to “better support small business owners and sole traders”.

Following on from its move to accept one year of financials for income verification for self-employed customers, ANZ is also now enabling self-employed customers who receive income through director fees or company dividends to provide one year of income documentation (rather than two) when applying for home loans.

Where customers have an existing ‘fixed rate and term’ asset finance, lease or hire purchase, ANZ has said it will now use the actual repayment as part of the assessment, instead of adding a 3 per cent interest rate buffer, making it easier to qualify for a home loan.

 
 

Customers with business overdrafts can also now amortise over 10 years, rather than seven, thereby enhancing borrowing capacity.

The updated policies are effective immediately.

According to the big four bank, the moves form part of ANZ’s broader strategy to ”make it easier for self-employed Australians to purchase a home”, particularly those with irregular income patterns and come following borrower feedback.

It said the new approach takes into consideration the realities of business cash flow, reducing the stress, complexity, and paperwork traditionally associated with the home loan application process.

Speaking to The Adviser about the changes, ANZ’s general manager, retail broker, Natalie Smith, commented: “We want to make it easier for brokers to support their customers based on their individual circumstances and property or business goals. These enhancements are a positive step forward in enabling brokers to deliver a seamless experience for their customers…

“We know that a significant number of our home loan applications are for self-employed customers – and this represents genuine opportunities for brokers.

“Offering a ‘full service’ by supporting customers with their home and business lending needs is a great opportunity for brokers to differentiate themselves in market.

“At ANZ, our retail and commercial broker teams work closely to ensure brokers are supported when helping both business and homeowners navigate the lending process.”

ANZ’s managing director for small to medium enterprise and Australia commercial, Paul Presland, said the move reflects the bank’s ongoing commitment to recognising the value and tenacity of Australia’s small business industry and the everyday realities of self-employed Australians.

“We’ve listened to our customers and are proud to lead the way in inclusive lending,” Presland said.

“Small business owners, freelancers, entrepreneurs and sole traders deserve the same access to home ownership as any other worker.

“These changes are about cutting red tape and recognising the value small businesses bring to our economy. We know they are already juggling enough – banking shouldn’t be another pain point.

“These updates are part of ANZ’s broader strategy to support Australian businesses to start, run and grow – both personally and professionally. No two small businesses are the same, and by tailoring our approach we’re not just simplifying the process, we’re ensuring Australian small businesses continue to thrive.”

The move by ANZ to make its lending policies more flexible comes amid a growing appetite by the majors for self-employed customers.

In March, National Australia Bank (NAB) also moved to accepting one-year tax returns for self-employed loan applicants at the beginning of this year, with Westpac Banking Corporation (Westpac) announcing it would do the same last month.

The Commonwealth Bank of Australia (CBA) made the move to one-year financials at the end of 2024.

Brokers have welcomed the recent changes by the majors to their self-employed borrowers’ policies, but several have told The Adviser that non-banks are still leading the way in this arena.

[Related: Brokers welcome bank self-employed policy changes]

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Annie Kane

AUTHOR

Annie Kane is the managing editor of Momentum's mortgage broking title, The Adviser.

As well as leading the editorial strategy, Annie writes news and features about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape.

She is also the host of the Elite Broker, New Broker, Mortgage & Finance Leader, Women in Finance and In Focus podcasts and The Adviser Live webcasts. 

Annie regularly emcees industry events and awards, such as the Better Business Summit, the Women in Finance Summit as well as other industry events.

Prior to joining The Adviser in 2016, Annie wrote for The Guardian Australia and had a speciality in sustainability.

She has also had her work published in several leading consumer titles, including Elle (Australia) magazine, BBC Music, BBC History and Homes & Antiques magazines.  

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