April – Changes to our credit policies


We’ve made further changes to our credit polices to further support our broker partners. April’s changes have been made with the goal of further simplifying and streamlining the application and approval process. Effective Monday 22 April 2024:

We’re increasing the loan size that Credit Analysts can approve without referring to Helia.

  • For Owner Occupied loans in Zone 1 and 2, the amount will increase from $1.5m to $2m.
  • For Investment loans in Zone 1 and Zone 2, the amount will increase from $1.3m to $2m.

Note: ApplyOnline® LVR will still show 80% for P&I loans as it does today, and AMP will still follow the current process of Helia approval. Helia has also provided AMP Bank a DUA of up to $5mn for all Zones except for Zone 5.

AMP Bank Credit Policy

This quick reference guide highlights the lending guidelines of the AMP Bank Credit Policy. If you require further detailed information, this policy should be consulted. Contact your Business Development Manager who will be able to assist.

Important: Policies are regularly updated. We recommend you do not print out policies to use as reference. Please refer to this page for the latest policy updates.

 

Additional resources

  

A-B

Acceptable loan purpose

Business purpose, housing, personal, cash out and bridging policies.

Business Purpose

  • Restricted to 10% of the total customer exposure to AMP Bank up to a maximum of $100k.
  • Can be used for:
    • Purchase of an established business however servicing cannot be reliant on income from the business being purchased.
    • Refinance of existing business loans noting the customer must be the owner of the business for a minimum of two financial years and provide financial data for both years.
  • For clarity, the following loan purpose is not categorised as business:
    • Refinance of a business debt that related to a closed/liquidated business where the income source to meet servicing is from an entirely unrelated entity. In other words, was self-employed but is now working as a PAYG employee.
    • Funds to invest in a commercial property if the customer is not intending to operate his/her/their own business from the premises. This is considered investment and is subject to standard commercial rental income discounts etc.
       
       

Personal

  • Debt consolidation - maximum 5 debts (home loan and 4 unsecured debts, subject to a maximum of $50,000 accumulated unsecured debt). Personal and/or other loans that resulted in the acquisition of an asset (eg: car loan) may be excluded from the $50,000 accumulated amount. If the applicant/s are unable to provide evidence for the original use of the funds, the loan should be included in the $50,000 cap.
  • Personal use (e.g. holiday, motor vehicle purchase).
  • Investment (e.g. purchase shares).

 


 

 

 

Bridging Policy 

If a simultaneous settlement cannot be negotiated and the purchase is required prior to the sale, we may consider bridging finance (for existing customers only) under the following circumstances:

  • Existing mortgage has been with AMP Bank for > six months and repayments have been maintained per contractual arrangements.
  • The incoming security satisfies acceptable property/s policy and is subject to a satisfactory valuation.
  • Where the existing home is not subject to an unconditional exchange of contracts, servicing is demonstrated on the 'peak debt' should the existing home be retained and become an investment property.
    • Rental income and gearing benefits to be applied per current policy.
    • Primary LMI not required.
    • No zone 5 (Ultra-High Risk) securities regardless of LVR.
    • Max LVR subject to standard policy based on $TBE.







Housing 

  • Purchase new or existing residential dwelling for owner occupation or investment.
  • Construct new residential dwelling for owner occupation or investment.
  • An extension or renovation to an existing property involving structural changes that require council approval.
  • Refinance existing owner occupied/personal and investment loans.
    • Maximum LVR for purchase, construction, increase of or refinance of investment housing/property debt is 80% on I/O repayment terms and 90% on P&I repayment terms (owner/occupied and personal purpose is 90% plus LMI, investment property lending is 90% inclusive of LMI).
  • Refinance on a dollar for dollar basis is acceptable on both P&I repayment terms (max LVR for owner/occupied is 90% plus LMI and investment property lending is 90% inclusive of LMI) and I/O repayment terms (max LVR 80% – including Master Limits). If the existing loan being refinanced is non-deductible and on interest only repayment terms, it is acceptable to mimic the same structure (subject to AMP Bank being satisfied the selection meets with the requirements and objectives of the applicant/s) however if cash out is also sought for non-deductible debt, the cash out portion must be on P&I repayment terms.
     

Cash Out Policy

  • 0 - 80% LVR - Cash out up to $500k for LVR < 70% and $250k where the LVR is > 70% is acceptable without evidence of use of funds (declared loan purpose) provided negative gearing in not required to assist with servicing. Cash out greater than these parameters must have evidence of the use of funds submitted as part of the supporting documentation by way of a Stat Dec and where available, may include additional documentation as follows:
    • Contract of sale.
    • Letter from a qualified accountant/financial planner.
    • Active share trading account.
    • Quotes/contracts etc for home improvements.
  • >80% - 90% LVR - Cash out component limited to 20% of the security value and subject to supporting documentation as per above.
  • Maximum cash out is $1m (refer to your BDM).
  • Note: Where the cash out is subject to multiple purposes, the Stat Dec must include a breakdown of each purpose and estimated cost. 

 

  • If the existing home has been sold and unconditional exchange of contracts can be verified, we may consider acceptance if servicing can be demonstrated on the proposed end debt but not the peak debt subject to:
    • Unconditional exchange and payment of the deposit by the purchaser to be confirmed in writing from the borrower's legal representative.
    • The letter is also to confirm that AMP bank's borrower is entitled to retain the deposit proceeds should the sale not proceed.
    • The settlement for the sale of the existing home is to be affected within 30 days from the purchase of the new property - as confirmed via the COS and/or confirmation via the applicant/s legal representative.
    • Tracking of the sale of the existing home, within 30 days from the settlement for the new purchase of the new home, is to be maintained and monitored within bank Operations and reported to the Credit Specialist Team if not complied with.
    • Primary LMI not required.
    • No zone 5 (Ultra-High Risk) securities regardless of LVR.
    • Max LVR subject to standard policy based on $TBE.
  • Where the existing home is not subject to an unconditional exchange and servicing cannot be demonstrated on the 'peak debt' should the existing home be retained as an investment property the request should be declined.

Acceptable location

See our AMP Bank Security Location Guide.

Acceptable security properties

Residential & rural properties, vacant residential land, unit blocks on one & separate titles, off the plan purchases, unacceptable property types.

All residential properties 

  • Residential owner occupied or investment properties fully serviced by power, water/tank water, utilities and road access.
  • Must be zoned residential or rural residential – (where the valuation report records the zoning as anything else ie: mixed business use but the valuer has confirmed the current use is residential (comments and pictures) and the zoning permits ongoing use, the zoning will be acceptable).
  • Maximum land area 40 hectares (100 acres).

Vacant residential land

  • Land size not to exceed 2.02 hectares (5 acres). No cross collateralisation of securities. Must be standalone security only.

 

Residential unit blocks on separate titles

  • Maximum 4 apartments per borrower in any one development.
  • Maximum total aggregate concentration of 25% in any one development up to a maximum of 10 units.

     

Rural residential properties

  • Must not be income producing. 


 

Residential unit blocks on one tile.

  • Maximum 4 units and 50% LVR up to $1 million.


 

Off the plan "purchases"

  • As per standard policy.



     

Unacceptable property types incl. (but not limited to)

  • Units/apartments less than 45m2 living area (excluding balconies and car accommodation). (For good quality properties located in a desirable and high demand capital city metropolitan location, the minimum living area is 40m2)
  • Converted hotels/motels
  • Converted churches/places of worship
  • Churches/places of worship
  • Residential property with a commercial content
  • Residential property used for a commercial purpose
  • Commercial property
  • Industrial property
  • Relocatable homes
  • Leasehold other than Crown Leasehold
  • Any property in excess of 50% per borrower in any one completed development that has a maximum of 8 properties in the development (duplexes are acceptable), or any property in excess of 4 per borrower in any one completed development where there are more than 8 properties in the development.
  • Boarding houses/hostels
  • Brothels
  • Specialised student accommodation
  • Any property subject to a rental guarantee (State and Federal Government properties are acceptable)
  • Any property that is subject to a ‘two tier’ market
  • Home units attached to management rights of the complex
  • Any property located in a flood zone greater than 1:100 year frequency or where the known flood height level is higher than the floor level
  • Any property located on a contaminated site
  • Any property having a land area greater than 40 hectares (100 acres)
  • Any property that is used for the purpose of farming
  • Specialised or unique properties
  • Over 55’s ‘ dwellings
  • Property with a capital value less than $60,000 (land and improvements)
  • Any property that will require developments of more than two dwellings on it
  • Boundary of property located within 50 metres of High Voltage Transmission Lines
  • Properties with partly finished construction work
  • Serviced apartments
  • Studio apartments/bedsitters
  • Any property located on an island that is not accessible by road
  • Any property with a “lease for life” covenant on title
  • National Rental Assistance Scheme (NRAS) properties
  • Display Homes (subject to leaseback by the builder)
  • Apartment/Unit buildings impacted by banned (combustible) aluminium composite panelling

Acceptable title

Types and restrictions.

Types

  • Torrens/Strata
  • Community (only South Australia)

Restrictions

  • Crown Purchase or Crown Leasehold acceptable with a minimum duration of the approved loan term plus 15 years.

Additional advances

Requirements, exclusions, features, serviceability and valuations for easy increases.

Requirements

  • Existing loans must be operating for at least three months and have a satisfactory loan repayment history (no arrears in the prior three months).
  • Only one additional advance permitted within any three-month period.

An updated credit report must be undertaken for each applicant and must be clear of any adverse listings.

 

Easy increases

Requirements

  • All applications must be on the AMP Bank Easy Increase Application form.
  • Existing PAYG and self-employed borrowers only.
  • Existing residential security only.
  • Existing loans must be operating for at least 3 months and have a satisfactory loan repayment history.

Not available for:

  • Low Doc Loans, Land Loans, Construction Loans, Practice Finance Loans, AMPCI Loans.
  • Vacant land security.
  • Loans that have been in arrears/over limit for >30 consecutive days in the last 6 months.
  • Loans with a business purpose.

Features

  • Maximum Loan Amount: $100,000 (no maximum $TBE).
  • Maximum LVR of 80% or subject to any other product specific LVR restrictions.

Serviceability

  • PAYG income details required as per standard policy.
  • Self-employed income details required as per standard policy.
  • All borrowers must sign the Easy Increase application form which includes a declaration that 'financial position has not adversely changed'.
  • An updated Credit Bureau check is required on all borrowers. If any defaults have been lodged since the last full credit assessment, it does not qualify for Easy Increase.

Valuations

  • As per standard policy.

Applicant type

Individual, company, Trust (individual or company), guarantors.

Individual

  • Must be over 18; and
  • Permanent residents or citizens of Australia or New Zealand; or
  • New Zealand borrowers must be living and working in Australia.

Note: All new to bank customers must be living and working in Australia. Lending to existing AMP Bank customers living and working overseas (ex-pats) may continue subject to current policy and procedure parameters.

Where applicable under the Banking Code of Practice, AMP Bank is required to confirm that all borrowers receive a direct substantial benefit from the loan proceeds, by way of:

  • Joint ownership of the security or other such reasonably proportionate legal or equitable interest in the asset/s purchased with the loan funds, including investment in shares/managed funds or other such investments via a ‘cash out’ transaction; or
  • A reasonable portion of the loan funds are used to repay debts or other obligations owed by the co- borrower individually.
  • As a guide, a minimum of 30% is deemed to satisfy the substantial benefit threshold or equal share if there are four or more borrowers.
  • It is not acceptable for an individual to be joined to a loan as a co-borrower simply to provide income support for servicing or to provide additional security for the other co-borrower/s to purchase an asset without receiving a substantial benefit (minimum 30%) from the loan/transaction.

 

Company

  • Incorporated in Australia
  • All directors of the company are required to provide personal limited guarantees for any loans provided.

 

Trust (individual or company)

  • Unit and discretionary trusts formed in Australia.
  • Loans must be in the name of trustee in their capacity as trustee of the trust.
  • Adult beneficiaries are required to provide their Consent & Indemnity.

Note: when lending to a company or trust customer, all ‘new to bank customer’ business must be for a minimum aggregate customer exposure (inclusive of the directors/trustees) of $1m (TBE). For additional guidance, please refer to the table below:

 

New application
Existing exposure  Accepted Y/N
XYZ Pty Ltd $500,000
Director home loan $600,000 Y
XYZ Pty Ltd $500,000 Director home loan $250,000 N
XYZ Pty Ltd $500,000
Director home loan $600,000
Nil Y
XYZ Pty Ltd $500,000
Director home loan $250,000
Separate director home loan $400,000 Y
XYZ Pty Ltd $500,000 Nil N
XYZ Pty Ltd $500,000
Director home loan $250,000
Nil N
     


Guarantors
 

For information on First Home Buyer Family Guarantee, refer to the First Home Buyer Family Guarantee page.

  • Must have one of the following relationships with the borrower:
    • Partner of the borrower (e.g. spouse, defacto).
      Note: the Bank may accept the spouse/partner as a 'servicing guarantor' if he/she is not on title of the security property and does not receive a substantial benefit from the proposed loan.
    • Where individuals are borrowing and security is owned by the company, guarantors/directors must be identical to borrowers.
    • Where a company is borrowing and security is not owned by the company, guarantors/directors must be identical to title holders.
    • Where a trust is borrowing and security is not owned by the trust/trustee, guarantors must be an adult beneficiary of the trust.
    • No outside (third) parties.
    • For all 'new to Bank' business, the guarantor must be living and working (where appropriate) in Australia.
    • The Bank will require the guarantor to obtain independent legal advice and may require them to obtain independent financial advice.

Refer to the below table for guidance on loan structure acceptable to AMP Bank, especially where it relates to substantial benefit from the transaction:

 

Loan purpose Current loan structure Proposed loan structure as submitted Existing property owner New property owner Income allowed for assessment Proposed loan structure acceptable Guarantor required Reason
Purchase Property N/A Husband and wife N/A Husband or wife individually Both No Husband or wife (not on title) Husband/wife added to debt with no substantial benefit therefore should be guarantor for servicing.
Refinance Husband and wife Husband and wife Husband or wife individually N/A Both Yes No

Acceptable given the non-title holder is already liable for the debt i.e. the existing loan being refinanced is in joint names.

If the transaction includes other loans not in joint names, the calculation for minimum benefit of 30% must be performed.

Reference Husband or wife individually Husband and wife Husband or wife individually N/A Both No Husband or wife (not on title) Husband/wife added to debt with no substantial benefit therefore should be a guarantor for servicing.
Refinance plus purchase Husband and wife Husband and wife (one application with multiple security) Husband or wife individually Husband or wife individually Both Possible (refer to reason column for more detail) Potentially the husband or wife

The existing joint loan being refinanced is allocated 50/50 for benefit calculations as both already liable for the debt.

The loan funds applied to the new purchase in either husband or wife name only is applied at 100% to that borrower.

Calculation must be performed to ensure minimum 30% benefit for is evident for either party.

Refinance plus purchase Husband or wife individually Husband and wife (one application with multiple security) Husband or wife individually Husband and wife Husband or wife (not on title) Possible (refer to reason column for more detail) Potentially the husband or wife

The funds for the new purchase (in joint names) will need to be a minimum of 60% of the total loan amount so the husband and wife individually receive a minimum of 30% benefit each from the total transaction.

If less than 60%, the husband or wife (not on title of the existing property) must be considered as a guarantor given minimum 30% benefit from the total transaction is not demonstrated.

Refinance plus purchase Husband or wife individually Husband and wife as co-borrowers Husband or wife individually (same as borrower on current loan) Husband or wife individually (same as borrower on current loan) Both No Husband or wife (not on title) Husband/wife added to debt with no substantial benefit therefore should be a guarantor for servicing.
Purchase plus cash out Husband or wife individually Husband and wife Husband or wife individually N/A Both Possible (refer to reason column for more detail) Possible

Two separate loans (applications) may be required with wife or husband as guarantor for the refinance (if the refinance is more than 60% of the total loan amount) and can be co-borrower on the cash out loan (application) subject to the Bank being satisfied both will receive substantial benefit from use of the cash out funds.

If however the cash out is the majority use of funds (minimum of 60% of the total loan amount) and both will obtain a substantial benefit from the use of those funds, it can be one single loan (application) as a co-borrower structure.

Alternatively, submit as one loan (application) with wife or husband as borrower and wife or husband as servicing guarantor (subject to gearing/tax requirements).

Refinance plus cash out Wife Husband and wife Wife N/A Both No Husband Two separate loans with husband as guarantor for the purchase and can be joint on the cash out subject to the Bank being satisfied both will receive substantial benefit from use of funds. If however the cash out is the majority use of funds and both will obtain a substantial benefit from the use of those funds, the loan can proceed as a co-borrower structure. Alternatively, one loan with wife as borrower and husband as servicing guarantor (subject to gearing/tax requirements).
                 

C-L

Construction loan

Maximum loan amounts, maximum LVR, conditions, loan assessment, exclusions, quantity surveyor.

Zoning

Refer to the Security Property Location Guide for zoning. 

 

Maximum construction loan amount with LMI

  • Zones 1 (Ultra-Low Risk) and Zone 2 (Low Risk) - $850,000 ≤ 90%
  • Zone 3 (Medium Risk) - $600,000 ≤ 90%
  • Zone 4 (High Risk) - $450,000 ≤ 90%

 

Maximum LVR

  • Maximum initial drawdown of vacant land value without LMI is:
    • Zones 1 (Ultra-Low Risk), Zone 2 (Low Risk) and Zone 3 (Medium Risk) - 80%.
    • Zone 4 (High Risk) - 80% up to $500,000 and 75% up to $1 million.
  • Maximum initial drawdown of vacant land value with LMI is 90% (subject to principal and interest repayment terms).
  • Maximum LVR with LMI during construction and upon completion is 90% (as above on completion, max LVR is 80% upon completion if interest only repayment terms selected).

 

Quantity Surveyor 

  • For construction loan amounts >$1 million the Bank will appoint, at the borrowers expense, a quantity surveyor (QS) to prepare a report on the fixed price construction cost compared to the QS costing of the project.

Conditions 

  • Must be in a product that offers construction loan feature. Product mixing is acceptable for existing facilities and remaining loan amounts not used for construction (cannot be combined with AMP Essential Home Loans)
  • Construction must be completed within 12 months of loan approval
  • Maximum of 2 dwellings to be constructed per borrower at one time.
  • The Bank will accept the lower of valuer's estimate of improvements or the fixed price building contract figure.
    • This typically only applies to new builds or knockdown rebuilds. Where the cost of renovations is greater than $100,000 and is applied as a construction loan, the value of the improvements 'on completion' from the valuation may be accepted given the existing dwelling already carries existing value. For example, existing home is worth $2m and is split $1.5m for the land and $0.500m for improvements. The customer now approaches the Bank with a fixed price contract of $0.300m for renovations and the new on completion valuation estimates the new value as $2.25m, split $1.5m for the land and $0.750m for improvements. In this case we do not apply the contract value of $0.300m as the total value for improvements
  • Prior to Formal Approval, the Bank requires copies of
    • Fixed price building contract, tender or detailed cost estimate from a licensed builder (does not have to be an eecuted copy)
    • Plans and specifications (does not have to be Council approved)
    • Any variations to the fixed price building contract and/or additional quotations from a licensed contractor
    • One week prior to the first progress payment, the Bank requires copies of:
      • Executed fixed price building contract (final valuation may be required at Borrowers expense).
        Note: this may be required earlier if the Bank's panel valuer requests.
      • Council Approved Plans and specifications (final valuation may be required at Borrowers expense).
      • Any variations to the fixed price building contract and/or additional quotations from a licensed contractor. If the customer requires additional funds to cover the variation, an increase and reassessment will apply.
      • Builder's licence.
      • Builder's all risk and indemnity insurance policy.
      • Homeowners Warranty Insurance.

Credit check

Completed on all individuals/companies/directors/guarantors.

Note: AMP Bank fully participates in Comprehensive (positive) Credit Reporting also known as CCR.

A credit check is completed on all individuals/companies/directors/guarantors.

Must have a clean credit record, except:

  • Borrowers who are discharged bankrupts will be considered subject to:
    • Minimum two years discharged from bankruptcy
    • Maximum LVR 80%
  • If a credit check identifies the Borrower(s) company is either under external administration or there is a petition, the application will only be considered if the company is not a borrower or income source and we can confirm the credit issue has been resolved.
  • If the credit check shows directorships, shareholding or proprietorships of companies that AMP Bank does not hold financial information for then we will request an accountant letter saying either the business is trading profitably (i.e. has not recorded any losses over the last 2 financial years) or does not trade at all and has no liabilities or debts. If this is not obtained 2 years financials for these companies will be required.

Exit strategy    

Borrowers approaching retirement, already retired and/or aged 60+.

Borrowers approaching retirement

  • Evidence of an exit strategy is required to confirm the debt can be repaid without hardship when the borrower is approaching retirement age (greater than or equal to 50 years old at the time of loan application).
  • A written exit strategy is a mandatory part of the supporting docs and must be provided by the originator at the time of lodgement - can comprise the Borrower/Broker Interview Guide (B.I.G).
  • The exit strategy should include:
    • The expected retirement age of the applicant(s).
    • The assets available to either pay out the loan upon retirement or continue to make repayments after retirement. These may include investment properties, superannuation, term deposits, other investments etc.
    • If downsizing to a smaller home, a detailed plan showing timeframe, expected sale and purchase price is required.
  • A financial plan or statement of advice from a qualified Financial Planner showing the exit strategy or ongoing repayment capability will be accepted in place of the exit strategy above.
  • If no exit strategy has been provided then the loan term must not exceed the expected age of retirement. AMP Bank will deem a customer's retirement age to be 70 unless we are advised that a borrower is planning to retire prior to 70.
  • No exit strategy or reduction in loan term is required if the loan services based on other income, such as rental, annuities and investments assuming that income is expected to continue for the full term of the loan.
  • All loans under this policy should be on Principal and Interest repayments (no interest only) unless it is clearly evident the Borrowers will be able to service any remaining Principal repayments based on the term remaining after any Interest Only period.
  • If the purpose of the loan is investment property and the borrower(s) have an existing owner occupied property then this policy does not apply.

Borrowers already retired and/ or aged 60+

  • Borrowers that have already retired or are aged 60 years or older (oldest applicant if joint borrowing) AND wish to provide their owner-occupied home as security where a valid and verifiable exit strategy cannot be demonstrated:
    • Will be subject to a maximum loan term of 10 years on P&I repayment terms.
    • If an applicant wishes to leverage equity from his/her/their owner-occupied home to assist with the purchase of an investment property:
      • AMP Bank will consider a maximum loan term of 10 years against the owner-occupied security under loan 1 (standalone); and
      • AMP Bank will consider a maximum loan term of 30 years against the investment security under loan 2 (standalone).
  • Note: Existing borrowers that fall into this category (retired/aged 60 or older AND have the owner-occupied property as part of the security) can apply for an increase subject to the remaining loan term on the system. If the loan term is to be extended, it can only be extended to a maximum loan term of 10 years – refer to the following examples for guidance:
    • Loan was approved 3 years ago over a loan term of 30 years. The increase must be assessed on the remaining term of 27 years (discounting any applicable I/O period) ie: the loan cannot be extended back to 30 years under an internal refinance;
    • Loan was approved 13 years ago over a loan term of 20 years. The increase must be assessed on the remaining term of 7 years however may be extended back to a maximum term of 10 years ie: max extension of 3 years.
  • Where a valid and verifiable exit strategy can be demonstrated, the loan term may be extended up to a maximum of 30 years, subject to:
    • Where the loan term exceeds 10 years, a minimum NMS of $500 is required (regardless of DTI and LVR).
    • The exit strategy may include:
      • Liquid assets (cash, shares, superannuation etc)
      • Equity in investment property
      • Equity/value of a business
      • The value of the above acceptable asset classes must be greater than the value of the loan at the time of application. We will not accept forecast growth to mitigate an approval.
      • The exit strategy must also not include downsizing of the PPOR regardless of the LVR.
  • Supporting documentation may include:
    • Liquid assets: evidence of the deposit holding (Term Deposits etc), superannuation statement and/or shareholding printout from a licenced financial planner, accountant or an accepted site including Link Market Services, Commsec, Computershare etc confirming the name, address, individual holdings and value at the time of submission.
    • Equity in investment properties: current debt confirmed via the bureau report (CCR) or bank statements where not reporting under CCR and an AVM where unencumbered or mortgaged externally - AMP Bank will arrange the AVM internally where required.
    • Business: supported by a formal valuation or statement from managing accountant (external to the business).

Family guarantee

Refer to the 'First Home Buyer Family Guarantee'.

Full doc loan characteristics

Term and minimum loan amount details.

Term

  • Maximum loan term 30 years for Housing/ Investment/ Personal purposes.
  • Maximum interest only term is 10 years.
    Note: the interest only term is deducted from the overall loan term for servicing purposes: If an overall 30 year loan term with 5 years interest only is selected, the P&I repayments are calculated over 25 years for servicing.

Minimum loan amount

$40,000    

High density apartments

Restrictions on unit developments with more than 10 units and located within a postcode defined as a high density location.

Definition

Unit developments with more than 10 units and located within a postcode defined as a high density location as per the Security Property Location Guide.

Restrictions

  • Maximum 90% LVR with LMI for owner occupied and 90% LVR inclusive of LMI for investment purchases of existing apartments greater than 6 months old (Principal and Interest repayment terms only).
  • Maximum 80% LVR for all other high-density apartments (Principal and Interest and Interest Only repayment terms allowed).
  • Maximum 2 apartments per borrower in any one development.
  • No rental guarantees.
  • Maximum total aggregate concentration of 25% in any one development up to a maximum of 10 units.

Income

PAYG, parental leave, self employed, rental, guarantor, superannuation, permanent pensions, unacceptable income, child support, investment, interest & overseas incomes.

PAYG Income

  • Full time/part time workers, casual employees and PAYG contractors must demonstrate employment stability of a minimum of 6 months with current employer. If less than 6 months with current employer, full time/part time workers (including those on probation) must demonstrate a minimum of 12 months continuous employment within the same occupation type (e.g. sales) or industry (e.g. mining). For casual employees and PAYG contractors where the length of employment is less than 6 months, AMP Bank will not accept the income for servicing. For an applicant, that is a casual/contract income worker, who has been with the current employer for a minimum of six months to be acceptable, he/she must have:
    • Been in the same industry AND job role/type for >= 12 months continuous employment;
    • Held no more than two separate roles within the previous 12 months**; and,
    • Be able to demonstrate consistency of earnings over the same period (prior 12 months) by way of income tax return and NOA, income statement or bank statements.

**Transient and/or seasonal casual workers that transition from role to role after only short periods of time remain an unacceptable borrower type.

  • Casual Income:
    The PAYG income calculator includes functionality to calculate casual income over a maximum 46-week year to allow for unpaid annual leave, sick leave and public holidays.

    For casual teachers that are not employed under a fixed term contract, the income must be calculated on a maximum 40-week year to cater for unpaid school holidays (refer to the PAYG income calculator).
  • PAYG Contractor:
    Where the analyst is able to determine, via the terms of the current contract, that the applicant is entitled to paid leave and other general entitlements associated with a permanent employee, he/she may proceed with the income assessment based on a full 52-week year subject to being satisfied with the applicant’s employment history and ongoing prospects of continued employment via a contract extension or new contract. In this regard, the analyst must seek a copy of the full employment contract to verify the terms of employment in addition to the standard forms of acceptable income verification documentation.
  • Income evidence must be provided from:
    • Two consecutive computer generated payslips confirming at least 3 months YTD income with the employer and employees names (Allow acceptance of emailed payslips as long as they contain (as a minimum) borrower name, employers name and ABN, and year-to-date income.). The most recent payslip must be less than 60 days old at the date the loan was submitted. (use PAYG income assessor to calculate the income that can be used for serviceability) OR
    • Where the most recent payslip shows less than 3 months YTD income, we require the two current payslips plus one of the following:
      • Latest year's income statement OR
      • Latest year's tax return and ATO Notice of Assessment OR
      • The last payslip from last financial year showing at least 3 months YTD income OR
      • An employment contract signed and dated that provides the employment conditions OR
      • An employment letter that is dated within the last 60 days that provides the employment conditions
    • Borrowers working for family/family companies must supply:
      • 2 years tax returns; and
      • Latest year's ATO Notice of Assessment.

Parental leave

  • We now accept 100% of the base income including annual/long service leave or employer/Government funded parenting payment (whichever is the lower) received during the parental leave period.
  • Casual employees may also be accepted where the Government funded parenting payment (or any employer funded payment if applicable) covers the parental leave period and we have written confirmation from the employer for the return to work date.
  • For both permanent and casual employees, we will now also accept savings to cover a gap of no more than 12 months between settlement and the verified return to work date where the parent is not receiving an income.
  • Evidence of the parental leave period (start and return to work date), income paid during the period and employment terms upon return to work (hours, income etc) must be provided prior to unconditional approval.
  • Parental leave must not exceed 12 months.

 

PAYG - overtime/ commissions/ bonus payments

  • Applicable to PAYG employees only
  • A maximum of 80% overtime / commission income is acceptable for serviceability, subject to the consistency verified on payslips provided
  • For applicants employed in ‘essential services’ (classified as Police, Doctors/Nurses, Paramedic/Ambulance, Firefighters, Public Transport Operations (train/bus/ferry) and Power/Energy Technicians (for example: linesman but excluding electricians) it is acceptable to consider 100% of overtime for servicing evidenced by current payslips plus prior year income statement to evidence consistency.
  • A maximum of 80% of bonus payments up to $50,000 and 50% of bonus payments exceeding $50,000 are acceptable for serviceability, subject to a Company bonus letter confirming the amount of bonus paid for the period or the payslip evidencing the bonus payment if paid more than 30 days prior to the application supported by the most recent payslip(s) reflecting the bonus payments in the YTD figure, or the latest income statement with the bonus payment included. The bonus amount to be utilised for servicing is calculated as follows:
    • $50,000 bonus at 80% = $40,000
    • $60,000 bonus is applied at 80% of $50,000 ($40,000) and 50% for the remaining $10,000 ($5,000) therefore total allowed as assessable bonus income = $45,000

 

PAYG - salary packaging/ vehicle allowance

  • Applicable to PAYG employees only
  • Pre or post tax deductions on payslips will be excluded from income used in serviceability. AMP Bank may consider adding back deductions if they can be converted to cash at any time.
  • Salary package can be included for serviceability subject to an employment letter confirming it can be converted to cash at the borrower's option
  • Vehicle allowance is acceptable for serviceability (lease or hire purchase payments must be included in assessment)
  • If we have used HEM for living expenses, $7,500 can be added to gross salary for borrowers that receive a fully maintained company car as a condition of their employment (to be confirmed by employment contract of employment letter)

 

Self-employed (sole trader/ parternship/ company/ trust income)

  • Minimum self employed period 2 years.
  • All applicants (including directors and trustees) must provide personal/company tax returns for the previous 2 years and the latest ATO assessment notice for each income source.
  • Balance Sheets and Profit & Loss statements must be provided for the previous 2 years.
  • Latest year’s financials must be provided for all applications received after 31 March.
  • Income projections and cashflow forecasts or income from a business being purchased are not acceptable for serviceability assessment.
  • When:
    • Income from the latest financial year has increased by less than or equal to 20% of the previous year, then the latest years income is used.
    • Income from the latest financial year is more than 20% of the previous year, then a maximum of 120% of the previous years income is used.
    • Income from the latest financial year is less than the previous year, the lower of the two figures is used.
  • Where the profit has increased by more than 20% in the most recent financial year, using amounts higher than 120% of the prior year may be considered at the analyst's discretion subject to:
    • Satisfactory explanation for the improved trading result; and
    • Interim financial data (minimum six months & accountant prepared) starting from 1 July of the current financial year and dated not more than 60 days from the date of lodgement; and
    • All relevant Business Activity Statements (BAS) provided to support the interim financial data; and
    • The interims and BAS confirm ongoing trading is equivalent to or better than the most recent full year results.

To clarify, refer to table below:

Date application lodged Interims  BAS 
Prior to end of December Not allowed Not allowed
February From 1 July to December/ January September/ December
April From 1 July to end of February/ March September/ December/ March

 

  • Interim guidance for additional supporting documents for self-employed customers:
    • 2020 and 2021 Financial Statements and Tax Returns.
    • BAS from 1 July 2021 to end of December 2022.

Note:

Where the 2021 and 2022 final Financial Statements are held and confirm similar/increased revenue and profit across both years, BAS is not required. If there is any doubt, the analyst may, at his/her discretion, seek the previous financial year BAS.

Furthermore, may also consider the interim impacts of COVID to the 2020/2021/2022 trading results. Where the business is able to confirm all indicators (revenue, expenses and profitability) are similar to or exceeding pre-pandemic levels, we may, where appropriate, consider servicing on the most recent trading results. Confirmation of the existing indicators include:

  • BAS (already part of our existing documentary requirements), and
  • Accountant prepared final 2022 financial statements.
  • Explanation of how COVID impacted the business and why the business is no longer impacted.

 

Self-employed addbacks

  • The following may be added back to the net profit figure:
    • Director's salary.
    • Interest charges on any loan being refinanced.
    • If the analyst is including the full repayment for all debt in the business name to calculate the adjusted NPBT available for distribution, then all interest charges may be included as an addback.
    • Superannuation payments in excess of legislative requirements.
    • Non recurring expenses.
    • Amortisation of goodwill.
    • 50% of depreciation (excluding short term items such as computer equipment etc).
    • Only the following distributions from a discretionary trust are allowed to be added back for serviceability:
      • Trustees distribution (Individual or Company)
      • Husband/Wife or defacto of the trustee
      • Dependent children of the trustee

 

Rental

  • Evidence from:
    • Current lease or tenancy agreement; or
    • Estimate of rental from AMP Bank valuation; or
    • Estimate of rental in writing by letter from licensed real estate agent (must be less than 60 days old); or
    • A current rental statement from a real estate agent (must be less than 60 days old).
    • Where multiple sources of income are supplied and one of them is a Lease Agreement, then rental income on the Agreement supersedes all other evidence held and will be used for serviceability purposes.
    • For the first point above only, it is acceptable to use bank statements to support ongoing receipt of rental income if the documentation has recently expired and the applicant/s are in the process of renewing with the tenant. The receipt of the rental income must post date the expired lease agreement. If however, verification of rental income is available from points (ii) to (iv), bank statements are not required.
  • Where a private lease or tenancy agreement is in place (e.g.: there is no real estate agent involved), then in addition to a copy of the lease or tenancy agreement we also require the last 6 months of bank statements evidencing rental income.
  • The maximum gross rental return included in servicing must be less than or equal to 6%. This applies to all acceptable rental income regardless of whether we take that property as security or not. For example, the annual rental income is $26,000 and the property value is $250,000 we would calculate the rental yield as: Annual Rental Income / Property Value x 100 = Rental Yield $26,000 / $250,000 x 100 = 10.4%. In this example, the rental yield is > 6% therefore we could only use 6% of the property value as the rental figure. Property Value x Floor Rate = Rental Included in Assessment $250,000 x 6% = $15,000 pa. Therefore $15,000 (or $288 per week) can be included as the gross rental income. This amount needs to be discounted further as we will only take 80% of this amount.
  • The following is acceptable for serviceability assessment:
    • 80% of the verified gross rental for residential properties located in Zone 1 (Ultra-Low Risk), Zone 2 (Low Risk) and Zone 3 (Medium Risk) postcodes, or 75% when rental income is based off a 3rd Party Estimate.
    • 70% of the verified gross rental for residential properties located in Zone 4 (High Risk) and Zone 5 (Ultra-High Risk) postcodes, or 65% when rental income is based of a 3rd Party Estimate.
    • 70% of the verified gross rental for units/apartments in high density postcodes, or 65% when rental income is based off a 3rd Party Estimate.
    • 50% of the verified gross rental for serviced apartment.
    • 65% of the verified gross rental for non-residential, commercial or industrial properties, or 60% when rental income is based off a 3rd Party Estimate. When the non-residential, commercial, or industrial property is owner occupied then only 50% of the verified gross rental income is to be used.
  • Rental guarantees (eg. for display homes) are not acceptable.

 

Guarantor income

  • Not acceptable except in the case of:
    • Spouse/partner of the borrower and he/she complies with guarantor policy;
    • Directors/trustees as guarantors for company/trust borrowings.

      Note
      : when director's/trustee's income is included a minimum surplus is required to be included in the assessment.

 

Superannuation/ annuity income

  • Evidence of this income must be verified by the following:
    • A statement of holdings dated within the last 6 months, and
    • Confirmation of the current balance dated within the last 30 days, and
    • Bank account statements dated within the last 60 days showing the payment amount.
  • Commonwealth Superannuation Corporation pension income:
    • A Commonwealth Superannuation Corporation statement or similar statement issued by the appropriate scheme dated within the last 12 months.

 

Permanent pensions

  • Only the following Centrelink income types are acceptable:
    • Age pension.
    • Widow allowance
    • Family Tax Benefit Part A*
    • Family Tax Benefit Part B*
    • Large Family Supplement*
  • * Family Tax Benefit part A, B and Large Family Supplements are only acceptable if the borrower can verify that it will be received for a minimum of 5 years. Therefore, Family Allowance will be allowable for all children who are under the age of 13 years.
  • Evidence of this income must be verified by the following:
    • A Centrelink statement dated within the last 60 days.
  • All other Centrelink pension types are not acceptable income types
  • Only the following Department of Veterans Affairs income types are acceptable:
    • Service and Age pension.
    • War Widow's or Widower's pension.
    • Permanent disability payment (refer ‘Unacceptable Pension/Benefit Types’ for more information).
  • Evidence of this income must be verified by the following:
    • A Department of Veterans Affairs statement dated within the last 30 days.
    • Bank account statement dated within the last 30 days.
  • All other Veterans Affairs pension types are not acceptable income types.

 

Unnaceptable income/ pension/ benefit types

  • The following pension/benefit types are not acceptable:
    • Unemployment/sickness benefits.
    • Non permanent pensions.
    • Worker's compensation.
    • Accommodation/student allowance.
    • Emergency benefits.
    • Scholarship income.
    • Higher Duties payments.
    • Disability Pension:
      • This does not include TPD payments through acceptable reputable insurers (ie: not administered through Centrelink) where the payment is representative of a material portion (if not full cover) of the customer’s original earnings. Disability income of this nature, including Dept of Defence, Police Force etc may be considered for servicing subject to verification in writing of the terms of the payment including permanency, annual increases, expiry date (expected to be typical retirement age) and confirmation the payment is NOT conditional upon regular medical check-ups.
    • For selected Dept of Vererans' Affairs pensions, we may accept the following as permanent and not subject to ongoing medical checks:
      • Disability Pension (payable under Veterans' Entitlements Act 1986 VEA)
      • Permanent impairment Payment (payable under MRCA)
    • DVA Income Replacement Payments including 'Incapacity Payments' and 'Special Rate Disability Payments' are both subject to change depending on the individual circumstances (medical checks and/or other compensation paid via the DVA) and should NOT be considered as a permanent payment when verifying income during the assessment.

 

Child support/ maintainence

  • Acceptable for dependents under the age of 13 years, registered with Child Support Agency (CSA) and verified by a copy of current years CSA Notice of Assessment and 6 months Bank statements.

 

Investment income

  • Maximum of 80% investment income is acceptable (including dividends from publicly traded companies).
  • Minimum 2 years investment/interest evidenced from previous 2 years tax returns. Income assessment is the same as described in Self Employed (above).
  • Capital gains on sale of assets is not acceptable income.

Note:

Where bank account or loan statements are required to verify repayment conduct, external debts, salary credits etc, statements sourced via ‘BankStatements.com’ or similar providers are acceptable subject to all information including account name, account number, balance, limit, interest rate, transaction history etc being readily identifiable.

 

Interest expense deductibility (previously known as Negative Gearing)

  • Gross rental income is as per 'Rental' above. In addition to rental income, interest expenses applicable to loans for residential or commercial investment purpose are to be calculated and this figure to be used to reduce the borrower's taxable income. The interest expense is to be included in serviceability as a non taxable addback.
  • Interest expense deductibility is not to be included for debt over vacant land.

 

Overseas income

Note: All new to bank customers must be living and working in Australia. Lending to existing AMP Bank customers living and working overseas (ex-pats) may continue subject to current policy and procedure parameters.

  • Maximum of 80% overseas income (salary, investment, rental) is acceptable as long as it is paid in one of the following currencies:
  Tier 1 Tier 2
Currencies Canadian Dollar (CAD) Chinese Yuan (CYN)*
Euro (EUR)  
British Pound (GBP)  
Hong Kong Dollar (HKD)  
Japanese Yen (JPY)  
New Zealand Dollar (NZD)  
Singapore Dollar (SGD)  
US Dollar (USD)  
% of overseas income (salary, investment and rental) acceptable 80%  50% 
     

* Chinese Yuan (CYN): To a maximum of USD$50,000 or equivalent.

  • Overseas self-employed income is not acceptable
  • The conversion will be based on the day of the initial credit assessment and the exchange rates published by the Reserve Bank of Australia as per the following site: http://www.rba.gov.au/statistics/frequency/exchange-rates.html
  • Confirmation of the income must be via a translated employment contract and the most recent 3 months bank statements showing the salary credits. All other standard employment and income policies are to apply.
  • Applicants with overseas income:
    • Maximum 70% LVR for Tier 1 currencies
    • Maximum 50% LVR for Tier 2 currencies

Land loan

Maximum loan & LVR amount and restrictions.

Zoning

Refer to the Security Property Location Guide for zoning
 

Maximum loan amount

  • Zone 1 (Ultra-Low Risk) and Zone 2 (Low Risk) - $600,000
  • Zone 3 (Medium Risk) - $400,000
  • Zone 4 (High Risk) - $200,000

 

Maximum LVR

  • Maximum LVR is 90% if on P&I repayment terms.
  • Maximum LVR is 80% if on I/O repayment terms.

Restrictions

  • Land size not to exceed 2.02 hectares (5 acres).
  • Must be zoned residential, rural residential or rural.
  • Property must have all weather road access and have electricity connected.
  • No cross collateralisation of securities, must be stand alone security.
  • Not available for Low Doc Loans or debt consolidation.
  • Construction Loan may be added as an extra split to the Land Loan, once construction is ready to commence.

LMI

Providers and capitalisation of LMI premium.

Providers

  • Helia.

Capitalisation of LMI Premium

  • Allowed on loans ≤ $1.5 million.
  • For full doc loans maximum LVR is 90% plus capitalisation of LMI premium for owner occupied/personal purpose and 90% inclusive of LMI for investment property related purpose.

In accordance with the Banking Code of Practice, AMP Bank will provide a fact sheet that contains information outlining the key policy features where Lenders Mortgage Insurance (LMI) is required – including eligibility (or otherwise) for a premium refund.

AMP Bank does not charge the borrower/s more for LMI than the actual cost incurred for the policy and does not receive a commission for any LMI policy established with the loan.

For insured loans settled after 20 April 2020, customers may be eligible for a partial refund of the mortgage insurance premium if the loan is discharged within 0-24 months of the settlement date. This information is now included in the LMI Fact Sheet provided to customers as part of their documentation pack.

Refer to your BDM for further information.

LVRs with LMI

Zoning details and applicants with overseas income.

Zoning

Refer to the Security Property Location Guide for zoning
 

Zone 1 (ultra-low risk) and Zone 2 (low risk)

  • Maximum 90% plus capped LMI for any acceptable owner occupied/personal purpose and 90% inclusive of LMI for investment purpose up to $2,000,000 (Principal and Interest terms only).
  • Maximum for business purposes $100,000 at 90% LVR plus capped LMI (Principal and Interest terms only).

Zone 3 (medium risk)

  • Maximum 90% plus capped LMI for any acceptable owner occupied/personal purpose and 90% inclusive of LMI for investment purpose up to $1,000,000 (Principal and Interest terms only).

Zone 4 (high risk)

  • Maximum 90% plus capped LMI for any acceptable owner occupied/personal purpose and 90% inclusive of LMI for investment purpose up to $750,000 (Principal and Interest terms only)

Zone 5 (ultra-high risk)

  • Maximum 90% plus capped LMI for any acceptable owner occupied/personal purpose and 90% inclusive of LMI for investment purpose up to $400,000 (Principal and Interest terms only).
  • Considered on case by case basis. LMI required regardless of LVR.

Applications with overseas income

  • Not accepted

*Loan amounts outside of the above parameters can be considered and will be subject to review/decision by the relevant mortgage insurer.

LVRs without LMI

Zoning details

Zoning

Refer to the Security Property Location Guide for zoning.

Zone 1 (ultra-low risk) and Zone 2 (low risk)

  • Maximum 80% up to $2 million.
  • Maximum 75% up to $3 million or 80% with multiple Zone 1 and/or Zone 2 securities.
  • Maximum 70% up to $3.5 million or 80% with multiple Zone 1 and/or Zone 2 securities.
  • Maximum 65% for greater than $3.5 million or 80% with multiple Zone 1 and/or Zone 2 securities.

Zone 3 (medium risk)

  • Maximum 80% up to $1 million.
  • Maximum 75% up to $2 million.
  • Maximum 70% up to $2.5 million.
  • Maximum 65% up to $3 million.
  • Maximum 60% for greater than $3 million.

 

 

Zone 4 (high risk)

  • Maximum 80% up to $750,000.
  • Maximum 70% up to $2 million.
  • Maximum 65% up to $2.5 million.
  • Maximum 60% up to $3 million.
  • Maximum 50% for greater than $3 million.


Zone 5 (ultra-high risk)

  • Lenders Mortgage Insurance (LMI) is required on all loans secured by property in Zone 5 locations regardless of loan amount and LVR.

Applications with overseas income

  • Maximum 70% for Tier 1 currencies.
  • Maximum 50% for Tier 2 currencies.

Refer to the Income section for full currency details.

M-Z

Master limit

Assessment criteria details.

Assessment Criteria

  • The sum of limits of all splits (called sub-accounts) must be equal to the approved Master Limit.
  • Maximum LVR with LMI inclusive is 80%.
  • Refer Acceptable Loan Purpose and Refinance Requirements if the application involves the refinance of an owner occupied loan.
  • Not allowable on Construction loans or AMP SuperEdge loans.
  • Master Limit expires after 10 years.
  • Line of Credit must be primary split on all Master Limits.
  • Serviceability assessment of the Master Limit feature is to be based on the entire Master Limit amount requested assessed over a maximum term of 20 years (where the Master Limit is 10 years) or 25 years (where the Master Limit term is 5 years) on Principal and Interest repayments.

Purchase requirement

Contract and savings history requirement details.

Contract of sale requirements

A copy of the completed front page of Contract of Sale and any special conditions must be provided prior to formal approval, contract could be unsigned at this stage. A copy of the full Contract of Sale signed and dated by the vendor must be provided prior to settlement.

 

Savings history requirements

Property Purchase LVR <= 85%

  • No supporting evidence of savings required. Borrowers should disclose evidence of savings in the asset position of the loan application form plus details of deposit already paid (holding deposit, 5% or 10% of the contract price).

Gifted funds to complete

  • The AMP Gift Declaration Letter must be from the person(s) giving the gift.

Property Purchase LVR > 85% with savings

  • Borrowers must contribute 5% of purchase price
  • Funds cannot be borrowed (personal loans, credit cards or loans from family members)
  • Funds must be held in the borrower's name(s)

Acceptable forms of savings include:

  • Funds in bank accounts/term deposits
  • Shares
  • Equity in residential property
  • Sale proceeds from residential property
  • Sale proceeds from assets (e.g. motor vehicle) 
  • Deposit paid for the property more than 3 months ago
  • Accelerated loan repayments where savings have been sacrificed by making accelerated loan repayments.
  • Employer paid bonus
  • Tax Refund
  • First Home Owner Grant (FHOG)
  • First Home Super Saver Scheme (FHSSS)
  • Gifted funds to complete
  • Funds sourced from Superannuation account
  • Inheritance
  • The following additional underwriting requirements apply:
    • Owner occupied purchases only
    • All 'funds to complete the purchase' (deposit plus settlement disbursements minus the FHSSS) must be evident at the time of the application

Genuine Savings

  • Evidence of genuine savings is not required for property purchases with a base LVR less than or equal to 90%

Refinance requirements

Refinance requirements and loan statements.

Debt consolidation - maximum 5 debts (home loan and 4 unsecured debts subject to a maximum $50,000 of accumulated unsecured debt). Personal and/or other loans that resulted in the acquisition of an asset (eg: car loan) may be excluded from the $50,000 accumulated amount. If the applicant/s are unable to provide evidence for the original use of the funds, the loan should be included in the $50,000 cap.

Loan Statements
Where the current lender fully participates in comprehensive credit reporting and all data (facility limit, repayment history information (RHI and FHI), loan term, repayment type etc) is up to date, we will use CCR to verify account conduct and/or verify declared liabilities remaining with the other lender. Where the full information is not available on the customer/s bureau report, the following documentary requirements still apply:

  • Six months loan statements (including those sourced via ‘BankStatements.com’ or similar provider) on all secured loans being refinanced must be provided. The most recent statement must be less than 30 days old from the date of application submission.
  • The Bank will not refinance any loan, which has been subject to poor repayment conduct.
  • For consolidation of personal debt a minimum of the last account statement (within 32 days old at the time of application submission) for credit cards or unsecured facilities must be provided. When applications require primary LMI mortgage insurers will require the last three account statements.
  • For unsecured facilities where latest loan statements are not available, transaction statements are acceptable in conjunction with last loan statements.

For more information, please refer to the Distributor Newsletter issued 31 July 2020 to access FAQs or contact your BDM.

Note:
Lodgement Centre (via the supporting docs checklist) still requires an originator to upload a document labelled as ‘Bank Statement’ remains a mandatory doc. In the interim, originators may upload a printout of the customer’s bureau report and label it as a bank statement to enable the application to be submitted

Serviceability

Taxation office debts, borrower living rent free, credit cards, factored rate, minimum net monthly surplus, common debt reducer, monthly living expenses & overseas liabilities.

Australian Taxation Office Debts

  • If a borrower has a debt payable to the Australian Taxation Office, AMP Bank require:
    • Include the agreed repayment arrangement with the ATO or where no repayment arrangement exists calculate the monthly repayments based on the full tax debt over a max 12 month period using a 10% p.a. assessment rate; or alternatively.
    • Obtain confirmation that the debt has been paid.

 

Borrower living rent free

  • Where a borrower is said to reside rent free with family/friends an amount of $150 per week is to be included in the borrower's expenses. The notional rental expense is to be included for each applicant who is living rent free.
    • The minimum notional rent also applies to rent and board where the declared expense is less than $150 per week.

 

Borrowers approaching retirement or borrowers already retired and/ or aged 60+

All AMP Bank and other bank loan repayments are assessed using a margin of 3% above the actual loan interest rate with a minimum factored rate of 6% or the actual declared repayment (whichever is higher).

 

Credit cards

3.80% of the credit card limit is included in serviceability.

 

Exclusion of Dependants

  • Can be excluded from servicing where the dependant is more than 16 years of age at application date, and they earn an independent income of minimum $1,500 per month, which can be evidenced via the most recent payslip (PAYG) or tax return (Self Employed).


Exclusion of non-loan party spouse

  • Can be excluded from servicing when, for HEM purposes, can demonstrate an independent annual income of minimum $45,000.
    • Multiple sources of income (e.g. Paylips, Tax Returns, Centrelink,...) can be used for verification purposes.
    • Where the source of income is work-derived (PAYG, Self-employed), the most recent payslip or most recent tax return is required.

Note: Mutual dependants (if any) are to be included in the application and servicing calculator.
Note: All joint liabilities from the borrower and the non-loan party spouse to be included in full.
Note: The share of living expenses contributed by the borrower is to be accounted for.


External Debt

  • The loan repayment amounts used for the surplus of external mortgages, personal loans, overdrafts, margin loans & lines of credit will be calculated by the higher of:
    • The total limit of the external Home Loan, Investment Loan, Margin Loan and/or Line of Credit factored at the loan assessment rate over a 30-year Principal and Interest term on a monthly basis with any interest only period discounted (where known);
    • The total limit of the external Personal Loan (secured or unsecured) and/or Equipment Finance (Lease, Chattel Mortgage or Hire Purchase excluding the balloon or residual payment) factored at the loan assessment rate over a maximum 5-year Principal and Interest term on a monthly basis, and any Interest Only period discounted from the remaining term (where known), and
    • The borrowers declared monthly repayment amounts.

Note: where known, the actual ‘loan term remaining’ should be captured in the relevant fields (online and/or the manual servicing calculator) to determine the appropriate repayment for servicing.

For all external debt that is not being refinanced/repaid with the new loan funds, the supporting documentation must now include, as a minimum, the most recent statement (within 60 days of the date of the application or if older, supported by an internet banking printout and/or snapshot) for all declared liabilities. The statement/internet banking printout/snapshot must include the current limit/balance and any available redraw, the current interest rate plus the minimum required repayment per month unless the details are available vie the customer bureau report under CCR.


Factored rate

All AMP Bank and other bank loan repayments are assessed using a margin of 3% above the actual loan interest rate with a minimum factored rate of 6% or the actual declared repayment (whichever is higher).
 


Minimum Net Monthly Surplus

The approval of a home loan application will require evidence of sufficient disposable income to enable the borrowers to maintain living expenses after meeting all AMP Bank home loan application commitments and any other regular monthly commitments.

Loan purpose: Owner Occupied / Personal Use or Investment

Where DTI ≥ 6x NMS ≤ $200  NMS > $200 
LVR > 80% No  No
LVR ≤ 80% No Yes

Note: All loans with an LVR > 90% (inclusie of capitalised LMI premium) will be subject to a minimum NMS of $500 (regardless of the DTI). 

For clarity; if the base LVR is less than 90%, however, the total LVR exceeds 90% once the LMI Premium is capitalised, then NMS threshold of $500 applies.


Common debt reducer

Where rental income from a property is received by two or more parties, the Bank will include the borrower’s portion of rental income/loan repayment for serviceability. e.g. borrower and brother have an equal split investment property loan with another bank. The Bank would include 50% of rental income and 50% of corresponding loan repayment in the serviceability assessment. To enable the Bank to proceed under this arrangement, the co-borrower/s on the existing investment debt must provide evidence of his/her/their ability to meet his/her/their portion of the debt. Refer ‘Statutory Declaration for Non-Borrowing Related Party’ available in the forms section (Home Loan Application Forms) on this site. Where the non-borrowing related party refuses to complete the declaration, the Bank will include 100% of the liability and 100% of the rental income but continue to apply negative gearing based on the relevant % ownership of the property.

Note: The provisions above do not apply for ‘owner occupied’ debt/rental expense held jointly with the applicant’s spouse/partner or another party or ‘investment’ debt held with the applicant’s spouse/partner. Where apportioning of debt is required in a spouse/partner scenario to achieve servicing, the spouse/partner must be considered as a servicing guarantor. Where the other party to the loan is not a spouse/partner, the full debt must be included in servicing. When submitting a loan that includes ‘common debt reducer’ for servicing, you must prepare and include the Bank’s manual serviceability calculator as part of your supporting documentation. This is to ensure the correct Debt to Income Ratio is also calculated – for further information, please refer to the Distributor Newsletter published on 11 December 2020 (available in the Newsletters/Awards section of this page).
 


Monthly living expenses

When there is an individual borrower who has a spouse/partner, and that spouse/partner is not a party to the loan as co-borrower, for calculating serviceability, the ‘applicant type’ is to be assessed as ‘joint’. If the inclusion of joint living expenses (inclusive of dependents) results in a negative monthly servicing position, the spouse/partner must be included in the application as a ‘servicing guarantor’ to ensure the household position is assessed in its entirety.
 


Overseas liabilities

All overseas liabilities and expenses are to be included in serviceability at 100%. The conversion will be based on the day of the initial credit assessment and the exchange rates published by the Reserve Bank of Australia as per the following site: http://www.rba.gov.au/statistics/frequency/exchange-rates.html

Contact your Business Development Manager

For any questions you have on AMP’s products and policies, the BDM assigned to your company is keen to take your call. If you’re unsure who your BDM is, head to our Contact us page.

Important information

All information on this website is subject to change without notice. It's important your customers consider their particular circumstances and read the relevant Product Disclosure Statement and Target Market Determination or Terms and Conditions before deciding what's right for them.

A target market determination for these products is available at distributor.amp.com.au/tmd

This information hasn't taken their circumstances into account. The credit provider and product issuer is AMP Bank Limited ABN 15 081 596 009, AFSL No 234517, Australian credit licence 234517.