borrowing capacity

[remingbi]

Not quite.

CBA are relatively generous - but that might change.

Nab's changes come into effect this Friday - they don't look too bad (again - that's relatively speaking). They are adding a "loading" to debt held with other banks - but that loading (as far as I know) hasn't been announced yet but I suspect it will be the same as Advantedge who are implementing a loading of 28% of the loan repayment amount (and they won't convert an IO loan to P&I).

WBC no longer allow neg gearing.

ANZ....well they've always been the least generous out of the 4 when it comes to servicing so I can't see them making adjustments.

You don't have to restrict yourself to the majors.

Cheers

Jamie

If nab end up assessing ofi debt with 28%loading as i/o if ur loan is i/o, that would b more generous than cba doing actual payment at P+I calculations
However as nab uses 7.4% p+i for their own loans to calculate serviceability, instead of cba 7.25% minus discount u received off svr, would it make sense to max out cba first, then nab, then goto firstmac and adelaide bank(via mortgage managers) after that?

thanks in advance

 

[Peter_Tersteeg]

would it make sense to max out cba first, then nab, then goto firstmac and adelaide bank(via mortgage managers) after that?

There's changes coming to Adelaide, this will likely filter through to the mortgage managers. If FirstMac aren't already adjusting their servicing criteria, it's only a matter of time.

 

[Jamie M]

If nab end up assessing ofi debt with 28%loading as i/o if ur loan is i/o, that would b more generous than cba doing actual payment at P+I calculations
However as nab uses 7.4% p+i for their own loans to calculate serviceability, instead of cba 7.25% minus discount u received off svr, would it make sense to max out cba first, then nab, then goto firstmac and adelaide bank(via mortgage managers) after that?

thanks in advance

Sounds logical to me. In reality though - the serviceability landscape is changing rapidly...so even if NAB seem to be generous today....that could change tomorrow.

Cheers

Jamie

 

[Brady]

What's the word on the street with CBA and servicing changes Brady?

Just done a pricing request this morning.

Max approved discount on $450k @ 90% was 0.80%

I believe won't see pricing above the carded special rates (not standard wealth pacakge rates, but just standard special rates... no further help from pricing team)

$250 - 500k
<80% 0.85%
80-90% 0.80%

$500 - 750k
<80% 0.90%
80-90% 0.85%

$750k+
<80% 0.95%
80-90% 1%

Lower discount, higher rate, higher assessment rate, lower serviceabilty.

 

[remingbi]

Just done a pricing request this morning.

Max approved discount on $450k @ 90% was 0.80%

I believe won't see pricing above the carded special rates (not standard wealth pacakge rates, but just standard special rates... no further help from pricing team)

$250 - 500k
<80% 0.85%
80-90% 0.80%

$500 - 750k
<80% 0.90%
80-90% 0.85%

$750k+
<80% 0.95%
80-90% 1%

Lower discount, higher rate, higher assessment rate, lower serviceabilty.

What about the rate on ppor+ip if borrowings over 750k@90%
Could cba give bigger discount on both ppor and ip if they had 2 loans
Or would they seperate the 2
Thanks

 

[Jess Peletier]

What about the rate on ppor+ip if borrowings over 750k@90%
Could cba give bigger discount on both ppor and ip if they had 2 loans
Or would they seperate the 2
Thanks

CBA will still price if the lending is for both PPOR and IP.

 

[Redom]

However as nab uses 7.4% p+i for their own loans to calculate serviceability, instead of cba 7.25% minus discount u received off svr, would it make sense to max out cba first, then nab, then goto firstmac and adelaide bank(via mortgage managers) after that?

thanks in advance

The logic behind ordering lenders specifically is something that had much more fruit when their were plenty of actual repayments lenders. I've talked about it at length on the forums and how to maximise 'serviceability' by switching lenders over time. But a lot of this doesn't apply to such a large extent in current policy settings. There are still a few out there, so it can be reasonably applied, but not to the majority of banks.

Banks won't really be competing for business by using serviceability calculators and positioning themselves to the market so much. It'll be based on other metrics (price, service, etc etc). At least for investors.

The previous models to build extremely large portfolios was all based on banks treating the mortgages a consumer holds with other financial institutions at different assessment rates (some at actual, some with small buffers and others with no difference in assessment rates).

Much of that won't apply now/in future, especially if there is a blanket approach to how other financial institution debts are being treated (most banks now treat it the same as their own debt).

Cheers,
Redom

 

[Brady]

What about the rate on ppor+ip if borrowings over 750k@90%
Could cba give bigger discount on both ppor and ip if they had 2 loans
Or would they seperate the 2
Thanks

CBA will still price if the lending is for both PPOR and IP.

As per Jess, they will still provide pricing on both if +PPOR. This can now play a big key. Banks will be pushing for PPOR.