As first revealed in The Australian, ING and Macquarie will include BNPL debts in their assessments of a borrower’s ability to repay their mortgage. 

Savings.com.au has since verified this change with Macquarie Bank and ING.

“Earlier this year APRA finalised revisions to Prudential Standard APS 220 Credit Risk Management to include macroprudential policy credit measures that apply to banks regulated by APRA,” an ING spokeswoman told Savings.com.au.

“In line with the new requirements, ING has updated its credit policy to treat buy now pay later (BNPL) transactions as debt when assessing a loan application.”

In June, the Australian Prudential Regulation Authority (APRA) announced banks and lenders should apply BNPL and HECS/HELP education debts to their debt-to-income calculation (DTI).

“To ensure a consistent approach is taken across industry, APRA has clarified below that HECS-HELP loans and debt incurred through BNPL schemes would be included in DTI ratios,” the regulator outlined.

The updated guidelines were to be met by ADIs from 1 September 2022.

ING notified brokers that BNPL arrangements with an ongoing limit were to be included for loan servicing purposes.

“BNPL arrangements with a remaining term (i.e. installment plan) are to be recorded and treated like personal loans, where the amount outstanding and total monthly repayment are used for servicing,” ING's email to brokers read.

“Where a BNPL facility is short term and temporary in nature, and confirmation is provided to this effect, the commitment can be removed for servicing purposes. Please ensure this information is noted on the application.”

ING also told brokers they should include HECS/HELP debt in their serviceability assessments.

In the same week, Macquarie told brokers to update their home loan servicing and DTI ratio requirements to also include BNPL commitments.

“BNPL will need to be captured in ApplyOnline and the serviceability calculator. Our new serviceability calculator includes this BNPL update and the most recent version of the Household Expenditure Measure (HEM),” the email read.

While the changes were effective from 19 December, Macquarie has a grace period on enforcing this new rule until 3 January 2023.

See Also: What is HEM?

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