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Rising demand for self-employed policy has prompted ANZ to update its Business Owner Home Owner policy.
The three key changes are:
- Business overdrafts: Business overdrafts can now be amortised over 10 years, rather than seven.
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Fixed-rate asset finance options: Where customers have an existing ‘fixed rate and term’ asset finance, lease or hire purchase, ANZ will use the actual repayment as part of assessment, instead of adding a 3 per cent interest rate buffer.
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Director fees/company dividends: Self-employed customers who receive income through director fees or company dividends will now only need to provide one year of income documentation, rather than two.
The increasing portion of self-employed borrowers with unique circumstances was a major reason behind the introduction of these policy changes.
Many of these customers have unique and irregular income streams. This can shut them out of being serviced by traditional lenders.
According to Paul Presland, ANZ managing director, small to medium enterprise, Australia commercial, the changes are part of the major’s broader strategy to better support SME customers.
“We’ve listened to our customers and are proud to lead the way in inclusive lending. Small business owners, freelancers, entrepreneurs and sole traders deserve the same access to home ownership as any other worker,” said Presland.
To take the heat off a rate increase?
In contrast to multiple lenders that have recently decreased interest rates, ANZ has increased its rates on the ANZ Plus variable home loan by 0.16 percentage points.
The new rate for owner-occupiers starts at 5.75 per cent and investors at 6.05 per cent.
This increase is exclusive to new borrowers. Existing customers will retain the old rate.
ANZ also discontinued the $2,000 cashback offer for refinancers on this loan.
Canstar’s data insights director Sally Tindall said the move was “unusual” less than a week from the RBA cash rate call, handed down on 12 August.
She said the increase is “a reminder some banks are still looking to protect margins.”
With the big four and plenty of other economists expecting the Reserve Bank to cut at next week’s meeting, the pressure on lenders to continue to cut rates will continue.
“While we expect all four big banks to step up and do the right thing by passing on the next cash rate cut in full to their variable customers, if you’ve got a mortgage, it’s worth keeping an eye on what your bank announces when the RBA does finally pull the trigger,” said Tindall.
“We’d urge lenders to remember that many households are still under intense financial pressure. After 13 RBA rate hikes, four of which were doubles, the third cash rate cut in the cycle is not the time to baulk.”
[Related: Interest rates dip below 5%, as competition heats up]
