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ANZ tightens investor servicing

ANZ has tightened its affordability criteria for investor lending and will only count 65% of rental income when assessing new mortgages, marking the first major change from a big four bank since the Government's housing reforms.

Tuesday, May 11th 2021, 10:04AM

TMM Online can reveal that ANZ will only count 65% of rental income, down from 75%.

The bank has informed advisers of the new rules, which come into effect on May 13.

The decision to recalculate rental property income is directly related to the Government's tax deductibility changes. Under the recent reforms, investors will no longer be able to offset interest against their rental income. 

While the tax deductibility changes will be gradually introduced, ANZ has taken a decision to act immediately. 

ANZ's new rule effectively reflects that investors will be 10% worse off under the new reforms, as investors brace for a financial hit under the new regime. 

The revised servicing calculations are likely to have a major impact on investors' ability to borrow, with other big four lenders and rivals expected to follow suit and impose new serviceability rules.

One adviser said the changes would "make it much harder for people who want to be landlords". 

"While ANZ is the first bank to do this, they are usually at the forefront with these changes, and I wouldn't be surprised to see the other banks follow," the adviser said. 

New builds will be exempt from the servicing calculator changes. The bank will continue to count 75% of rental income on new properties, according to advisers.

An ANZ spokesman confirmed the changes in a statement.

"In late March, the NZ Government announced a number of housing policy changes as a means of reducing the heat in the NZ housing market along with supporting first home buyers.

"One of these policy changes was to remove the ability for property investors to offset their interest expenses against their rental income when calculating their tax obligations. Although this is to be phased in over a four-year period from October 1, 2021, we consider this change will have an impact on serviceability for many investors.

"As a responsible lender, ANZ has an obligation to appropriately reflect this within our lending assessment process for new residential investment lending. So from mid-May we will be decreasing the amount of rental income that we take into consideration within the assessment from 75% to 65% to initially reflect this policy change," the spokesman added.

Tags: ANZ investor lending

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.79 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.79 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 ▼8.09 ▼7.59 ▼7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 ▼9.09 ▼8.59 ▼8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.29 7.32 6.65

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