Move comes amid ‘property spruikers’ taking advantage of unintended loophole
Macquarie Bank, Australia’s fifth-largest mortgage lender, has stopped the practice of lending home loans to trusts and companies.
Macquarie made the announcement in correspondence sent to brokers and seen by MPA.
The move comes amid concerns that the practice has been adopted by social media “property spruikers” to skirt serviceability requirements.
“With application volumes increasing, we’re adjusting our approach to ensure we continue delivering market-leading turnaround times and high service standards for brokers and customer,” said the correspondence.
It also referenced “the emergence of strategies on social media aimed at maximising lending through trusts and companies”.
Troy Phillips, managing partner at Sydney-based brokerage FirstPoint Mortgage Brokers, welcomed the move.
“We always viewed it as a grey area; the original intent was never to give borrowers access to significant leverage purely off a declaration,” Phillips told MPA.
“Macquarie’s change simply closes an unintended loophole around serviceability. Previously, borrowers could exclude property-related debt held in standalone trust structures from assessment, based on a director’s declaration, it wasn’t designed for that purpose.
“The policy update makes complete sense. It strengthens responsible lending and protects borrowers from taking on unmanageable debt levels. Macquarie remain a market leader in the self-employed space, and this move only reinforces that position”.
Macquarie also referenced incoming anti-money laundering regulations, “which will require additional verification steps for trust and company loans, making the origination process more complex and time-consuming for banks, brokers, and customers”.
The bank said: “Our core home loan offering remains unchanged for borrowers who are individuals – this includes owner-occupiers and investors with PAYG and/or self-employed income.
“For borrowers who are individuals, we’ll continue to accept income from trusts and companies. Existing home loans to trusts and companies are not affected by this change.”
