Maximum depreciation as an addback for home loan

Hi, just wondering if lenders impose a limit on how much depreciation can be used as an addback when going for a home loan? We acquired a lot of assets this financial year and as it currently stands our depreciation is ~ 70% of our NPBT. This will work in our favour for commercial lending but not sure how it works for residential.

Have asked the local ANZ mobile lender who I used a while back for a home loan and he said there was no limit on depreciation with ANZ but he didn't seem confident at all so just wanted to check.

Thanks.

 

Yes $0

 

Really? Oh I forgot to mention that I'm a sole trader.

 

If you mean business assets then I am not sure on any restrictions

 

Hi Terry, yep referring to business assets - heavy machinery etc

 

Rolf, any chance those loan applications you're referring to were under lmi territory or did it happen at 80% lvr as well?

I'm planning to get a home loan in the next financial year @ 80% lvr so was hoping the significant depreciation won't be an issue.

 

I’m seeing a lot of feelings in assessors lately too. Above and below 80. Painful. Difficult to manage.

 

As long as you have a clear item shown on your financial statement as depreciation it can be added back to your servicing.

 

I’m not across all lenders, but one mortgage insurer will use lower 20% of net profit or actual depreciation (the lower of the two), one will use 30% np or actual (or lower of the two).... how that equates through to 80% or under deals with lenders I’m not too sure

 

ANZ cap depreciation at $20,000 for LMI deals. For 80% you will probably need to show 2 years financials and they may scale it back because of how much it is.
If there's new debt to go with the assets purchased and your a sole trader I'd make sure the numbers are run accurately before any application because they sensitise that sort of debt with very high interest rates.
I'd possibly even look at a different lender instead.