ANZ — the cheapest Big 4 rate card, the harshest deductions chain. The borrowable haircut, step by step.
ANZ writes the sharpest variable rate of the Big 4 (5.78% sub-60% LVR OO) — and then trims your borrowable harder than any of the other three. The rate looks like the deal; the deduction chain quietly eats most of the savings. This page walks the chain on one hypothetical file, line by line, so you can see exactly where the capacity goes.
The structural shape of the ANZ submission
ANZ's broker proposition is built on a sharp headline rate plus a conservative back-end. The rate sells the file at the kitchen table. The serviceability calc decides what the file actually qualifies for. On any moderate-to-tight file, the gap between ANZ's 5.78% headline and CBA's 5.99% headline is < $90/month of repayment — but the borrowable gap between ANZ and the panel median is regularly $80,000-$100,000.
The deductions aren't hidden — they're each individually defensible (industry-standard shading on bonus, HEM-higher on living expenses, 3% buffer on assessment, conservative DTI). What's structural about ANZ is the compounding. Every step is at the conservative end of the standard. Stacked, the chain hurts more than any single rule would.
The deduction chain · same file, every step
From gross income to ANZ's final borrowable — the waterfall.
One file. Australian PAYG household. Two earners. The chain below uses ANZ's published shading rules + the APRA buffer to walk from the household's headline gross income down to the actual loan amount ANZ will write. Real numbers; representative file.
The file: Two PAYG earners. Borrower 1 base salary $140,000 + $24,000 annual bonus (regular). Borrower 2 base salary $96,000. Combined investment property rental $32,000/yr. Two children (no childcare). $5,000 credit card limit. Monthly living expenses declared $5,800. Loan term 30 years, OO P&I, sub-80% LVR.
Step 0 · starting figure
Gross household income (incl. bonus + rental)
Headline figure before any lender touches it. The number the household actually sees on tax assessments.
Step 1 · bonus shading
−20% on the bonus component
ANZ shades regular bonus income to 80% (industry standard for major banks). $24,000 bonus → $19,200 assessable. Non-banks typically take the full bonus.
Step 2 · rental shading
−20% on rental income
ANZ takes rental income at 80%. $32,000 rental → $25,600 assessable. The 20% haircut is meant to cover vacancy + management fees + ongoing maintenance.
Step 3 · PAYG tax
−PAYG tax + Medicare
Standard ATO PAYG schedule applied to the gross-of-shading figures. Two-earner couple, no salary sacrifice modelled. This is the same step every lender takes — the chain departs after this.
Step 4 · living expenses
HEM-higher rule
ANZ applies the standard prudential rule: take the higher of declared monthly expenses ($5,800 = $69,600/yr) or the HEM benchmark for two adults + two kids ($72,000/yr for this income band). HEM wins by $2,400. Other lenders apply the same rule; the household-composition HEM table is APRA-mandated.
Step 5 · liability servicing
Credit card 3.8% × 12 + investment loan reassessment
$5,000 card limit assessed at $5,000 × 3.8% × 12 = $2,280/yr. Existing $480,000 investment loan reassessed at ANZ's own assessment rate over remaining term (the standard re-amortisation rule that catches investors out) — adds ~$42,000/yr to imputed servicing.
Step 6 · buffered assessment rate
Reverse-amortise at 8.99% over 30 yrs
The residual $91,120 annual servicing surplus reverse-amortised at ANZ's assessment rate (revert 5.99% + APRA 3% buffer = 8.99%) over a 30-year term produces the max principal ANZ's servicing side will write. The 3% buffer is APRA-mandated for banks; non-banks use 2.0-2.75%.
Step 7 · DTI cap
7.0× gross household income
ANZ caps loans at 7.0× household gross income (before shading). $292,000 × 7.0 = $2,044,000 — well above the servicing-derived figure on this file, so DTI is non-binding. On lower-income / higher-bonus files DTI is the binding constraint.
Step 8 · final
ANZ's maximum borrowable on this file
The lower of the servicing-derived and the DTI-derived figures. On this file, servicing binds.
The panel sees this same file differently
ANZ — final borrowable
$945,000
After the full deductions chain above.
Panel median (62 lenders)
$1,034,000
Same file, run across every active home-loan lender on the Esteb & Co panel as at May 2026.
$89,000 gap. Same gross income, same liabilities, same household. The gap is the deductions chain compounding — non-banks shade bonus less harshly, use a 2.5% buffer instead of 3%, take rental at 100% in some cases. The rate saving from ANZ's 5.78% vs the panel median ~5.95% is ~$95/month on a $640k loan over 30 years; the borrowable haircut is structural.
Where ANZ wins anyway — the file types the chain doesn't hurt
- Strong-servicing PAYG with low liabilities. If the chain doesn't bite (no existing debt, no bonus reliance, declared expenses below HEM), the 5.78% rate compounds in the borrower's favour.
- 95% LVR investor files. ANZ and CBA are the only Big 4 writing 95% LVR investment loans with LMI. NAB and Westpac cap at 90%. For deposit-constrained investor files this is the binding factor.
- Brand-stability comfort files. Borrowers anchored to "I want a Big 4". ANZ at 5.78% delivers the Big 4 trust signal at a non-Big-4 rate.
- Sub-60% LVR refinance plays. The sharpest rate band — ANZ is materially below CBA/NAB/Westpac in the <60% LVR tier specifically. Refinancers with 40%+ equity see the full rate advantage with no servicing test pressure.
Want to see ANZ vs the rest of the panel on your file?
The borrowing-capacity calculator runs ANZ's actual deduction chain against your inputs and quotes the result alongside every other lender on the panel. No email gate before you see the spread.
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