AMP Bank simplifies self-employed policies

AMP Bank has announced significant changes to its loan assessment policies for self-employed borrowers and those with rental and bonus income.

Following consultations with brokers and customers, the second-tier bank has streamlined the documentation requirement for business owners before loan approval and increased the consideration given to bonus and rental income when determining loan eligibility.

Paul Herbert (pictured above), AMP Bank’s head of lending and everyday banking, said, "Having listened to our brokers and customers, we are confident the steps we have taken to simplify and streamline our approach to capturing self-employed income, rental income and bonus income calculation will save time, reduce complexity and help more customers to reach their goals.”

All changes will take effect from July 1, 2024.

AMP Bank’s changes to the self-employed income policy

When brokers submit a home loan for a self-employed customer, AMP Bank will only require:

• An established customer ABN for a minimum of two years 
• One-year tax return (most recent) and Notice of Assessment for individuals (sole traders, directors or partners) 
• One-year tax return (most recent) for business entities (company, partnership & trust)  

If customers meet servicing with the one-year tax return and Notice of Assessment, AMP Bank won’t require any other financial statements. 

To access AMP Bank’s self-employed calculator guide, click here.

AMP Banks’ changes to bonus shading and rental shading

From July 1, AMP Bank’s bonus income shading policy will be uncapped at 20% over one year, meaning 80% of after-tax bonus income will apply to a customer’s income assessment, irrespective of the size of the bonus.

The previous policy terms shaded 20% of bonus income up to $50,000, with any bonus income in excess of $50,000 shaded at 50%.

In terms of rentals, there will be:

•  20% shading on all residential investment properties in all zones (inclusive of high-density apartments). This will happen regardless of the documentary evidence provided whether it be a lease agreement, rental statement, or third-party estimate.
   
• 35% shading on all non-residential, commercial or industrial investment or owner-occupied properties (third-party estimates not allowed).
   
• 35% shading on serviced apartments and short-term rentals, and 20% shading where documentary evidence is a third-party estimate.

The previous policy terms shaded rental income at varying rates (ranging from 20-40% based on zones, property types and in based on verified rental income or third-party estimates.

More information about AMP Bank’s lending policies is available here.

Continued innovation with brokers in mind

The latest policy changes come after a series of announcements by AMP Bank as it gears up towards FY25.

On April 30, the bank announced it had created a new end-to-end home loan application process with the help of Simpology.

This will be piloted in the fourth quarter of 2024 (October/November), before it’s fully rolled out in the second quarter of 2025 (April/May).

The new loan process will include fully digitised identification processes, up-front verification of credit-critical data prior to submission, and instant feedback on application data to allow real-time decisions.

Following that, AMP Bank also announced in June that it had partnered with MSA National – a legal services provider – to provide mortgage documentation and settlement services.

Herbert said the latest enhancements and recent announcements were further demonstration of AMP Bank’s strong commitment to brokers.

 “AMP Bank believes brokers are vitally important to a highly competitive lending market and in helping Australians achieve the best possible loan outcomes,” he said.

“Importantly, the changes firmly align with AMP Bank’s strategy to support Australia’s small-business community which will also see the launch of a new digital bank in early 2025 using Engine by Starling technology.”