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Effective 12 June 2026, the bank will cap interest expense deductions at rental income when assessing serviceability for established residential investment properties purchased after 12 May 2026. Negative gearing will still be considered for any properties bought before or on 12 May.
In line with the proposed government policy, negative gearing benefits will continue to be recognised for eligible new-build properties.
The changes align ING’s credit assessment approach with the government’s proposed reforms to negative gearing in the federal budget, the first tranche of which passed the lower house on 4 June. It has now been referred to the Senate economics legislation committee, which will report by 22 June.
ING also outlined transitional arrangements for applications already in the pipeline.
Existing approvals resubmitted for minor administrative changes before 12 July 2026 will not be reassessed retrospectively, while pre-approved loans, applications requiring material changes, and approvals amended after the grace period will be assessed under the new negative gearing treatment.
For customers with multiple investment properties, any serviceability benefit will be capped at rental income where total interest expenses exceed total rental income after shading.
The bank said it is updating its online serviceability calculator and will provide a further update once the revised version is available.
Serviceability models shift ahead of legislation
ING joins a growing list of lenders that have already moved to reflect the government’s proposed negative gearing reforms in their serviceability assessments.
Macquarie was the first to act, updating its calculator on 18 May to remove most negative gearing tax add-backs for investment properties that fall outside the new rules. Great Southern Bank followed on 21 May, while National Australia Bank and Connective Horizon announced policy changes on 26 May.
Suncorp Bank then advised brokers that applications not unconditionally approved by 27 May would be assessed under the new framework, before parent bank Australia New Zealand Banking Group confirmed similar changes a day later for applications yet to receive unconditional approval by 28 May.
The Commonwealth Bank of Australia said to brokers that it was rewiring its servicing calculations on 28 May as well.
Westpac has so far stopped short of implementing formal policy changes but has indicated that negative gearing is unlikely to be recognised on additional lending for established investment properties once its review is complete.
[Related: Senate urged to soften negative gearing and CGT reforms]
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