Are DTI Ratio's coming?

Discussion in 'Loans & Mortgage Brokers' started by euro73, 3rd Oct, 2019.

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  1. euro73

    euro73 Well-Known Member Business Member

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  2. euro73

    euro73 Well-Known Member Business Member

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    Don't you love my spelling ? :)
     
  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    ANZ have introduced one and a few other lenders too
     
  4. euro73

    euro73 Well-Known Member Business Member

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    Yes, that's the link I provided :)
     
  5. Codie

    Codie Well-Known Member

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    Is this assessed over your entire portfolio? IE you have 8 loans with other lenders, your total DTI may be 20, you apply for another loan with ANZ and get told no chance?

    Or is it single application? How does rent get taken into account?

    Loan of $1m rent $40k pa. & Income of $160k =$200k - DTI of 5?
     
  6. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Dti is over the lot
    Ta

    Rolf
     
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  7. Simon Hampel

    Simon Hampel Founder Staff Member

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    Fixed!
     
  8. euro73

    euro73 Well-Known Member Business Member

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    Thank You Sir
     
  9. Redom

    Redom Mortgage Broker Business Plus Member

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    DTI ratios don't make too much sense in Australia. DTI ratios are a method of calculating serviceability. Most banks use a different method to work this out in Australia (NMS, net monthly surplus based). Adding DTI's on top of an existing metric doesn't really do anything. Nonetheless, its a 'risk measure' applied on top to provide some additional context to applications. DTI's are good in that sense - one clear measurable and comparable figure between applications (NMS is actuals based, not a ratio, so not as good of a comparator).

    These changes with DTI's are close to meaningless - especially with the DTI ratios the banks are actually implementing. They're already well above what the net monthly surplus methodology produces. I.e. there are very few cases were one will pass borrowing power via the NMS and breach the DTI ratio. They are very generally closely correlated to each other.
     
  10. spludgey

    spludgey Well-Known Member

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    Mine is around 11 including IP income and 24 without, so I guess no ANZ for me any time soon.
     
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  11. Empire

    Empire Well-Known Member

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    To put this into context, Ireland's banks have a debt to income of 3.5, which was introduced post gfc.
     
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  12. Rex

    Rex Well-Known Member

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    9x GROSS income - sounds fairly high to me. Hard to imagine how people can pass serviceability nowadays beyond that level anyway.
     
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  13. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Imagine this in Sydney, you wouldn't be able to buy anything.
     
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  14. euro73

    euro73 Well-Known Member Business Member

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    From Macquarie today - looks like cash out above 70% LVR is the only type of scenario affected .....

    Screenshot 2019-10-16 17.55.04.png