ANZ has launched a pilot mortgage product that offers special deals to borrowers in 145 select postcodes, primarily in wealthy areas of Sydney like Double Bay, Rose Bay, and Bronte.
The new mortgage product is targeted at high-income borrowers, requiring a minimum income of $400,000. Borrowers can take out loans between $5-8 million without needing mortgage insurance, and the loans can be structured as interest-only.
The rates on these loans are about 0.35% higher than the broader mortgage market, but the customized nature of the deals is meant to appeal to the wealthiest borrowers.
This move by ANZ is seen as a way for major banks to carve out the richest borrowers and offer them exceptional deals, in response to tighter regulations from the prudential regulator that have restricted banks’ ability to expand their loan books.
The pilot is being tested by mortgage brokers this month, and the banks are using new analytics to identify the wealthiest postcodes to target with these exclusive mortgage offerings.
Experts note this will further segregate the mortgage market, with the wealthiest borrowers getting access to specialized products not available to the broader market. There are concerns this could create a “perennial advantage” for the rich, as interest-only loans can be passed down through generations.
Overall, the article portrays this as a strategic move by major banks like ANZ to cater to their wealthiest customers in the face of tighter regulations, potentially widening the divide between the mortgage options available to the rich versus the general population.
Source: The Australian