ANZ's New Mortgage Insurance Policy Faces Backlash
ANZ is under fire for its recent decision to cut lenders' mortgage insurance (LMI) for borrowers in some of Australia's wealthiest suburbs, a move many deem "unfair" to other prospective homebuyers.
The new policy allows residents in affluent areas to secure a 95 percent loan without paying for LMI, saving them thousands compared to borrowers in other regions. Among the 145 postcodes benefiting from this Low Risk LMI Waiver policy are Toorak, Point Piper, Hamilton, and Cottesloe.
RateCity’s research director, Sally Tindall, criticized the policy, telling 9 News, “On the surface, it feels incredibly unfair.” She explained that ANZ is strategically targeting high-net-worth individuals considered low risk, highlighting the competitive nature among the big four banks to attract premium customers.
Applicants under this scheme must invest a minimum of $2 million but can secure loans between $5 million and $8 million, all while avoiding LMI. The policy predominantly benefits suburbs in Sydney, including North Bridge, Manly, Bronte, Cremorne, and Killara, as well as Brighton, Malvern, Essendon, and Lorne in Victoria. Queensland’s Tenerife, Ascot, and Chandler, and Western Australia’s Crawley, Mosman Park, and City Beach also make the list. Notably, no suburbs in South Australia, Tasmania, or the Northern Territory are included.
An ANZ spokesperson defended the policy, stating the bank considers various factors when adjusting lending policies. These factors include detailed customer reviews, responsible lending checks, income verification, application of a 3 percent buffer, and assessment of a customer's repayment history.
This new policy mirrors existing LMI waivers available to certain professional groups such as accountants, lawyers, and medical professionals. The selected postcodes were chosen based on average property values, market size, and depth. The policy applies to standard residential properties like houses, units, or apartments, excluding vacant land.
This development underscores the ongoing debate over equity and accessibility in Australia's housing market, with critics arguing it further entrenches advantages for the wealthy at the expense of broader accessibility.
