‘Unfair’: ANZ slammed for slashing lenders’ mortgage insurance for country’s richest suburbs

One Aussie bank is slashing lenders’ mortgage insurance for borrowers in some of the country’s richest suburbs – and not everyone is happy about it.

ANZ is slashing lenders’ mortgage insurance (LMI) for people living in some of the country’s richest areas in a move that’s been slammed as “unfair” for others looking to get a foot in the property market.

The new policy allows lenders to take out a 95 per cent loan without needing to pay an insurance, saving thousands of dollars compared with people in other areas.

Toorak, Point Piper, Hamilton, Cottesloe – considered some of the richest suburbs in the country – are among the list of 145 postcodes where people are covered under the Low Risk LMI Waiver policy.

But the move has been slammed by RateCity’s Sally Tindall, who told 9 News: “On the surface it feels incredibly unfair”.

ANZ is slashing lenders’ mortgage insurance for borrowers who live in some of the country’s richest postcodes. Picture: NewsWire / Kelly Barnes

“This is a strategic move from ANZ,” Ms Tindall, the financial comparison website’s research director, explained.

“It is cherrypicking high net worth individuals who are deemed to be low risk.

“It certainly speaks to a market where the big four banks are quite proactively trying to get customers off one another.”

Applicants under the scheme must invest a minimum of $2m but can secure loans ranging between $5-8m, all while avoiding LMI.

Many of the suburbs covered under ANZ’s policy are in Sydney – with North Bridge, Manly, Bronte, Cremorne and Killara making the cut.

The Victorian suburbs of Brighton, Malvern, Essendon and Lorne are also included.

Point Piper in NSW, which is one of the richest postcodes in Australia, is among the 145 postcodes covered under the policy. Picture: NewsWire/ Ben Symons

In Queensland, Tenerife, Ascot and Chandler are covered while four suburbs from Western Australia – Crawley, Mosman Park and City Beach – were selected.

There were no suburbs in South Australia, Tasmania or the Northern Territory covered under the policy.

An ANZ spokesman said the bank considers a range of factors when introducing or changing lending policies.

“Our standard lending process, which applies across all lending policies, includes a detailed customer review, responsible lending checks, income verification, and application of the 3 per cent buffer, as well as a consideration of a customer’s repayment history,” the spokesman said.

RateCity director of research Sally Tindall says the policy is “unfair” and akin to cherrypicking high net worth individuals. Picture: Supplied

An ANZ spokesman said the bank considers a range of factors when introducing or changing lending policies. Picture: Newswire / Gaye Gerard

The bank’s new policy is not dissimilar to existing LMI waivers already available to some borrowers.

Customers who are accounting, legal or medical professionals are already eligible for premium waivers with ANZ home loans

It is understood the specific postcodes were chosen on factors like average property values, size and depth of market.

Properties subject to the policy must also be considered a “standard residential”, like a house, unit or apartment and not vacant land.

Originally published as ‘Unfair’: ANZ slammed for slashing lenders’ mortgage insurance for country’s richest suburbs