11. Serviceability

Living Expenses

We use the higher of Income Based HEM or borrowers declared figure.

Income-based HEM determined on:

  • Household earned income (total gross income + rent, shaded at 80% before tax) – negative gearing benefit + other untaxed income)
  • Marital status
  • Number of dependants (For joint custody, the higher of Child support or HEM to be used)

For Specialist+ products, accounts where borrowers conduct their day to day transactions are to be reviewed to support living expenses used.  The higher of income based HEM, declared or assessed figure will be used for servicing.

Underwriters to also review statements for undisclosed debts, gambling, unexplained large transactions.

Unique and/or ongoing expenses not covered by HEM categories. Expenses such as Afterpay and ZipPay are to be listed as liabilities if ongoing.

The Bluestone servicing calculator attributes and compares the following, based on the latest LIXI standard,  to the income-based HEM figure:
  • Childcare
  • Clothing and personal care
  • Public or Government Primary & Secondary Education
  • Higher Education & Vocational Training
  • Groceries
  • General Insurance
  • Medical and health (excluding Insurance)
  • Primary Residence Costs (excluding education)
  • Recreation and entertainment
  • Telephone, Internet, Pay TV and Media subscriptions
  • Transport
  • Other Insurances
  • Personal Insurances
  • Secondary Residence and Holiday Home Costs
  • Investment Property Costs (rental income is shaded instead)
  • Other
  • Child and spouse maintenance
  • Board or rent
  • Private schooling and tuition
  • Strata/Body Corporate

Personal Loan Repayments and Credit Cards/Overdrafts

Personal loans with other financial institutions assessed at actual monthly repayment amounts.

New and existing Bluestone loans assessed at stressed monthly repayment amounts.

Credit Cards and Overdrafts monthly repayments calculated at 3.8% of the relevant limit.

Stressed Repayments on other Mortgage debts

Stressed repayments are calculated using the higher of:

  • Broker entered rate plus applicable stress rate as per the new loan (either 1.5% or 2%)
  • Floor rate of 5.25%

All over our application loan term.

If the actual repayment declared on the application in AOL is higher than the above, this will be used.

ATO Debts on repayment plans

An existing ATO debt can remain without being paid out and cleared where the ATO has a formally agreed repayment plan which is being met in accordance with the agreement. The following criteria must be met:

  • Eligible products are Near Prime, Specialist/+
  • Maximum ATO debt cannot exceed $100,000
  • The balloon payment (if applicable) must be pro-rata’d to the tenure of the debt agreement and split up accordingly and factored into servicing alongside the minimum monthly payment

This will be included in serviceability calculations.