Understanding investment and other income for servicing

The documents required will vary depending on whether your customer is purchasing an investment property or they already own the investment property.

For proposed purchases:

Where the proposed property is to be used as a security property on their Macquarie home loan, the lesser of:

• the rent as per the Macquarie Bank ordered valuation
• a licensed real estate agent’s estimate/tenancy management agreement (completed in the 60 days prior to submitting the application), where a range is provided, the lower amount will be used, or
• a current executed tenancy agreement, lease extension or variation (arms-length through a real estate agent), showing rent, commencement date and termination date (evidenced also in the contract of sale).

For existing property owned:

The actual rental income as verified from any of the following documents:

• Valid rental income statement (last 60 days)
• A current executed tenancy agreement (arms-length through a real estate agent), showing rent, commencement date and termination date
• Most recent tax return
• Annual rental income statement covering the most recent financial year, or
• Bank statements showing at least three months of rental credits.

We’ll consider 100% of child support as secondary income only if the following applies:

• The agreement is registered with the Child Support Agency and a copy is provided. A court order is also considered if a copy is provided and payments are evidenced in line with the order.
• Consistent payments over 6 months are evidenced by the borrower’s bank statements.
• Maintenance payments are considered permanent for the next 5 years.
• The dependent child is under 11 years old at the time of the application.

We’ll consider 100% of family allowance as secondary income only if the following applies:

• Payments are verified via government issued family allowance statements.
• The dependent child is under 11 years old at the time of application.

We’ll consider up to 100% of superannuation pensions where they’re confirmed as permanent and ongoing by the superannuation provider. This includes government superannuation pensions (e.g. Comsuper and Military pensions).

Acceptable foreign income can be limited to annuity pension, rental or investment income. In specific circumstances we may also consider a PAYG applicant.

Annuity pensions, rental or investment income can’t be the sole source or majority of income to meet loan serviceability. We’ll typically accept 80% of income and consistent performance needs to be evidenced across the past two Australian tax returns.

For PAYG applicants, we’ll accept applicants that are employed by a foreign entity, are paid foreign income and have a valid current Australian residential address. In this scenario, the following guidelines apply:

100% of disability benefits and income protection insurance payments can generally be used in servicing if all the following apply: 

• It isn’t the predominant source of income.
• Payment is ongoing and not subject to medical review.
• The benefit is payable for the term of the loan or until retirement age (assumed to be 70 years, unless advised earlier).
• These income types are to be treated as taxable income.