ANZ is making several changes to the existing minimum living expense values. These changes are being made to ensure that ANZ is continuing to reflect the financial position of its customers accurately when making an assessment of whether or not an offer of credit is unsuitable for a borrower.
The Melbourne Institute has released a new Household Expenditure Measure (HEM) table which ANZ will apply from Monday 6 May 2019.
ANZ will now use customers' gross annual income for the purposes of HEM look up.
ANZ has taken a proxy for rental expenses, reducing the total gross value by 5% when assessing customer's HEM figure.
To determine serviceability, ANZ will continue to use the higher of:
- the customer's stated expenses; or
- the new applicable minimum living expense
What happens to in-flight applications in the system already?
For new applications that are submitted on, or after, the Effective Date (6th of May 2019), the updated expense parameters will be applied. For applications currently in AST/AIP (approval in principle) status prior to the Effective Date, they will be assessed under the previous expense parameters. If any reassessments are made, on or after the Effective Date, it can be assessed under the previous expense parameters provided there has been no increase in the amount of lending requested or any other credit critical changes from the original credit assessment. If an application has already been declined or expired, the new expense parameters are to apply to any subsequent application made by the same customer.
Related topic’s worth reading: