Broker originated loans trending up at ANZ

Amid this trend, lending standards and processes at the major bank have also changed in the past year

News

By

The number of mortgages originating from brokers at ANZ has been on a steady increase since FY14, according to the bank’s yearly financial results.
 
The bank’s portfolio consisted of 47% broker-originated loans in FY14 – a figure which has increased by 1% every financial year since. This put the total number of mortgages secured through brokers at ANZ at 49% for FY16.
 
ANZ’s total loan book grew 7% from $231 billion to $246 billion from FY15 to FY16.
 
Breaking this down, 37% of all mortgages were interest-only, holding steady from last year. Looking at the type of loan, 62% were owner-occupied while 34% were investment loans – down from 58% and 37% respectively in FY15.
 
The vast majority of loans have an LVR of lower than 75%. While the average LVR at origination remained steady at 71% the average dynamic LVR increased from 50% to 52% from FY15 to FY16.
 

 
Thirty-nine per cent of borrowers were ahead of their payments, which was down from the 42% last year.
 

 
ANZ has also made changes to its lending standards, applying an interest rate floor to new and existing mortgage lending introduced at 7.25%. Additionally, the bank has brought in an income adjusted living expense floor (HEM) and a 20% haircut for overtime and commission income. There is also an increased income discount factor for residential rental income from 20% to 25%.
 
The bank has also reduced its LVR cap to 90% for investment loans and 70% for mortgages in high risk mining towns. The maximum interest-only term of owner occupied interest-only loans has also been decreased to five years.
 
Finally, the annual report also went over the individual steps in ANZ’s origination process:
 

 
Related stories:
 
YBR grows loan book by $39b
 
National Australia Bank continues to snap up brokers
 
Australia & NZ Banking Group CEO says banks face diminishing returns

Keep up with the latest news and events

Join our mailing list, it’s free!