Non-majors announce tweaks to self-employed policies

ING Australia (ING) and Bankwest have both made changes to their self-employed lending policies in the past few days.

Bankwest pauses 80% LVR lending to self-employed borrowers

Effective from 5 December, Bankwest will pause new lending to self-employed clients with a loan-to-value ratio (LVR) over 80 per cent.

The decision has been driven by Bankwest’s upcoming switch in lenders mortgage insurance providers (Bankwest is moving from QBE to Arch in February, with parent company CBA also moving to Arch after its contract with Helia expires at the end of December), as well as a push to rebalance the portfolio by bringing more PAYG customers into the mix.

Existing loans – and those in pipeline – will not be impacted.

However, it is expected that the change may only be temporary, as new policies for loans above 80 per cent will reportedly be developed with the new LMI provider next year.

Speaking to Broker Daily, Ian Rakhit, Bankwest’s general manager for third party, confirmed that the two main reasons for pausing higher LVR lending for self-employed clients were just to the change in LMI providers and rebalancing the book.

“We do really, really well on self-employed. We have a number of policies which win us a lot of self-employed business. For example, we have a true, one-year financial policy, which is very popular with brokers. And the second popular self-employed policy we have is where the business owner pays themselves a salary,” Rakhit said.

“We are very strong in both of those markets because of our policies on both.

“But we want to balance this and bring more PAYG customers in.”

Indeed, Bankwest has experienced a sharp increase in self-employed flows in recent years after rebuilding its proposition in consultation with brokers. Self-employed lending reportedly grew from around 20 per cent to more than 40 per cent of its book after the overhaul.

He said that while the proportion of self-employed loans in the higher LVR brackets made up “only a very small proportion of Bankwest business”, the bank thought that having “a balanced book was a good idea”.

“In the same way that you might not want too much investor or too much owner-occupied lending, you also don’t want too much high LVR or even low LVR lending. A good position for any lender is to have good representation for each of the sectors,” he said.

“The vast majority of the self-employed work we do today is completely unaffected, because this is only lending above 80 per cent LVR.

“Bankwest remains committed to the self-employed market.”

ING enhances self-employed lending policy

Meanwhile, ING Australia has updated its self-employed policy settings to introduce new income verification pathways, accepting proportional company income for serviceability, and broadening eligibility for trust structures.

The changes, effective 5 December, include:

• A new one-year income verification option, allowing borrowers to rely on a single year of income (with 90 per cent shading) for LVRs up to 80 per cent, with conditions including at least two years’ trading history, minimum 50 per cent company ownership, and use of simple, single-layer trust structures.
  
  

• Greater use of company income, with borrowers who own at least 50 per cent of a company now able to use their proportional share of company profits for assessment. Previously, ING required 100 per cent ownership.
  
  

• Acceptance of simple single-layer trust arrangements, such as income flowing from a company to a family trust before being distributed to the borrower.
  
  

• Three distinct income verification pathways: a one-year option, a two-year financials option (allowing up to 95 per cent LVR for owner-occupied), and a method using two years of individual tax returns.
  
  

Multi-layer trust structures remain out of scope for the one- and two-year financials methods, but may be accepted under the tax return pathway, provided undistributed profits and addbacks are not used.

As of 1 December 2025, ING also began offering new customers the ability to refinance loans up to a maximum 90 per cent LVR (with expectations that this might be rolled out to existing customers in 2026).

ING said the changes were driven by broker feedback and reflect growing focus on the self-employed segment, which it sees as a major opportunity following strong credit policy-driven growth across its investor book over the past 12–18 months.

[Related: Self-employed surge a golden opportunity for brokers: Pepper Money]