Credit Crunch: 💥 Negative Gearing Updates You Need to Know This Week

Lenders are already responding to the proposed Federal Budget changes, so now is the time to double-check calculators, confirm contract dates and workshop anything complex early.

 

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The key theme across lenders is broadly consistent:

• For established residential investment properties with a contract date after Tuesday 12 May 2026, negative gearing will generally no longer be included in servicing.
• Grandfathering may apply where the contract was dated on or before 12 May 2026.
• Eligible new-build investment properties may continue to qualify for negative gearing treatment, subject to each lender’s definition and assessment.
• Dollar-for-dollar refinances of grandfathered investment properties may still be assessed using negative gearing.
• Where cash out or top-ups are involved, negative gearing treatment may depend on whether the funds are being used to purchase or improve an eligible property.

The key broker checks are now:

• Contract date
• Unconditional approval date
• Established property vs new build
• Refinance vs purchase
• Cash-out purpose
• Lender calculator version
• Whether the client is actually relying on negative gearing to pass servicing

Lender-specific negative gearing changes this week:

🏦 1. ANZ

ANZ’s negative gearing treatment depends on both the contract date and approval status.

• Contracts entered into on or before 12 May 2026 remain eligible to use negative gearing in serviceability.
• Contracts entered into after 12 May 2026 will generally only qualify where:
  • the application is unconditionally approved by close of business Thursday 28 May 2026, or
  • the property meets ANZ’s definition of a new build.
• In-flight applications not unconditionally approved by COB Thursday 28 May 2026 will be reassessed.
• Refinances of existing properties purchased on or before 12 May 2026 may still be eligible.
• Top-ups and cash out may be eligible where funds are used to purchase or improve an eligible property.

ANZ has also updated policy for Home Loans in a Company Name, with eligibility now limited to existing ANZ customers who meet specific requirements, including director involvement, personal guarantee and minimum ownership requirements.

🏦 2. NAB

NAB’s approach also depends on contract date and approval status.

• Contracts dated on or before 12 May 2026 will continue to be assessed with negative gearing applied.
• For contracts dated after 12 May 2026, negative gearing will only continue where:
  • the application was unconditionally approved by COB Tuesday 26 May 2026, or
  • the property meets NAB’s new-build requirements.
• If the application was not unconditionally approved by that deadline, NAB will reassess.
• NAB has provided examples of eligible and non-eligible new builds, so brokers should check the detail before relying on negative gearing.

🏦 3. Great Southern Bank

Great Southern Bank has confirmed the common approach but has provided useful detail around refinances and owner-occupied conversions.

• Established residential investment properties with a contract date after Tuesday 12 May 2026 will no longer have negative gearing included in servicing.
• This does not apply to:
  • established properties with contracts dated on or before 12 May 2026
  • eligible new-build investment properties
• Dollar-for-dollar refinances of grandfathered investment properties may still be assessed using negative gearing.
• For refinances with cash out, negative gearing may apply to the amount used to replace existing debt and funds used to improve the eligible property.
• Other cash-out purposes will be assessed under current servicing.
• Properties held on or before 12 May 2026 and later converted from owner-occupied to investment may be eligible once rented, subject to normal credit policy.

🏦 4. Suncorp Bank

Suncorp’s key distinction is the specific timing cut-off.

• Properties purchased after 12 May 2026 at 7:30pm AEST will only be eligible to use negative gearing in servicing if they meet Suncorp’s definition of a new build.
• Applications not unconditionally approved by COB Wednesday 27 May 2026 will be reassessed.
• Negative gearing will only apply where the property is eligible.

🏦 5. Macquarie

Macquarie’s key update is calculator-based.

• Macquarie has updated its serviceability calculator from Tuesday 26 May 2026 to reflect the proposed negative gearing changes.
• Brokers now need to complete the new Rental Income and Tax Deductions worksheet for all investment properties held.
• Required details include:
  • loan balance, not loan limit
  • tax deductibility eligibility
  • annual rental income
  • annual property expenses
  • ownership percentage for each applicant
• Interest expenses can continue to be deducted from rental income.
• Grouping/pooling across multiple investment properties held in the same name remains available.
• ApplyOnline may not yet reflect Macquarie’s updated approach.
• Brokers should use Macquarie’s latest calculator as the final serviceability check.
• If an NSR warning appears in ApplyOnline, the application may still proceed if it passes using Macquarie’s updated calculator.

🏦 6. ME Bank

ME Bank’s update is not a direct negative gearing policy change, but the CAT update is relevant to servicing and tax deduction treatment.

• ME Bank has updated its Credit Assessment Tool following the quarterly HEM update.
• Changes apply from Monday 25 May 2026.
• A new Securities Ownership section has been added to the Loan Tax Deductions tab.
• This should be used where ownership or tax treatment differs across applicants or securities.
• Applications without unconditional approval or AIP by the next HEM update, expected August 2026, may be assessed using the updated 25 May 2026 HEM values.

🏦 7. Ubank

Ubank is worth noting because it does not rely on negative gearing in the same way.

• Ubank has historically not relied on negative gearing in servicing. Instead, it uses a rental shading approach.
• Ubank generally uses:
  • 90% of gross rental income
  • no tax applied
  • 10% property cost applied automatically in the calculator
• This may make Ubank useful to consider where negative gearing changes are impacting servicing outcomes.

🏦 8. Bluestone

Bluestone has confirmed the negative gearing benefit remains available. As these measures are not yet law and remain subject to legislation, Bluestone’s lending approach has not changed.

• Investment expenses are factored within HEM.
• Negative gearing benefit remains available, subject to clarification with Bluestone.
• Bluestone remains active in investor, trust and company lending.
• Can service solely on rental income.
• Residential, commercial and short-term stay income assessed at 80%.

🏦 9. Go Beyond by Thinktank

Go Beyond by Thinktank has clarified how negative gearing may apply to related entity liabilities.

• For SPVs/non-trading entities:
  • liabilities must be disclosed
  • liabilities must be included in servicing
  • negative gearing may be applied where eligible
  • statements are generally not required, subject to further enquiries
• For trading entities:
  • an accountant’s solvency letter is required if seeking to remove liabilities from servicing.

🏦 10. Bankwest

Bankwest has adopted the common post-Budget approach, with changes effective from Friday 29 May 2026.

• For investor applications involving the purchase or refinance of an established dwelling, where the contract date is after 12 May 2026, tax deductibility benefits will no longer be included in servicing.
• This includes cash out where funds are used to purchase an established property contracted after 12 May 2026.
• The change does not apply to properties contracted or acquired on or before 12 May 2026, applications unconditionally approved before 29 May 2026, or eligible new-build investment properties.
• Bankwest’s new-build definition includes off-the-plan apartments, replacement of an existing property with a greater number of dwellings, and residential construction on previously vacant land.

Broker Takeaway

The main message is that most lenders are moving in the same direction: established investment properties contracted after 12 May 2026 are unlikely to receive negative gearing treatment unless the property qualifies as an eligible new build.

The detail now sits in the exceptions — approval cut-off dates, refinance treatment, cash-out purpose, new-build definitions and calculator requirements.

This is where brokers need to slow down, check the dates, confirm the lender calculator and document the strategy before lodging.

 

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Now onto a more detailed A-Z of lender updates and reminders:

🏦 ANZ — Negative Gearing Changes

Negative Gearing Changes

New purchase applications:

• Contracts entered into on or before 12 May 2026 remain eligible to use negative gearing in serviceability
• Contracts entered into after 12 May 2026 will only be eligible where:
  • the application is unconditionally approved by close of business Thursday 28 May 2026, or
  • the property meets ANZ’s definition of a new build

In-flight applications:

• Already unconditionally approved applications are not impacted
• Applications not unconditionally approved by close of business Thursday 28 May 2026 will be reassessed
• Negative gearing will only apply if the property is eligible under ANZ’s assessment

Refinances:

• Refinance of existing property purchased on or before 12 May 2026 may still be eligible for negative gearing
• Eligible new builds may also continue to qualify

Top-ups and cash out:

• May be eligible where funds are used to purchase an eligible property
• May be eligible where funds are used to improve an eligible property

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🏦 Bankwest — Negative Gearing and a Reminder - 1% Refinance Exception Assessment

 Bankwest has now confirmed changes to the treatment of tax deductibility benefits in serviceability, effective Friday 29 May 2026.

For investor applications involving the purchase or refinance of an established dwelling, where the contract date is after Tuesday 12 May 2026, tax deductibility benefits will no longer be included in servicing.

This also includes new loans involving cash out where the funds are being used to purchase an established property with a contract date after 12 May 2026.

This change does not apply to:

• Purchases or cash out for purchases of established properties with a contract of sale dated on or before 12 May 2026
• Refinances of established properties acquired on or before 12 May 2026
• Applications unconditionally approved prior to 29 May 2026
• New-build investment properties

Bankwest defines new builds as:

• A newly constructed apartment bought off the plan
• An existing property that has been demolished and replaced with a greater number of dwellings
• Residential investment property construction on previously vacant land

💥 Bankwest reminder: Refinance Exception Assessment Policy, allowing eligible clients to be assessed using a reduced 1% buffer.

Where this may assist

Investors:

• Transition from P&I to Interest Only
• Reset to a new five-year IO term
• Extend loan term back to 30 years

Owner occupiers:

• Refinance to a more competitive rate
• Assist clients who do not meet standard 3% buffer servicing

Key eligibility criteria

• LVR must be ≤ 80%
• Loan must be at least 12 months old
• Clean repayment history, with no missed repayments in the past 12 months
• Loan increase limited to existing limits plus the lower of $10,000 or 1%
• Additional lending permitted for switching costs only

Lending limits

• Total lending ≤ $1 million: up to 1% above current limits
• Total lending over $1 million: maximum additional $10,000

Not eligible

• Bridging or construction lending
• Multiple borrowers, guarantors or overseas applicants
• Owner-occupied loans with IO repayments
• Hardship or arrears in the past 12 months
• Cash-out, debt consolidation or new credit
• Changes to borrower structure, including separation or divorce
• Self-employed income applicants

Important notes

• No additional policy exceptions, other than income documentation
• Internal refinances are eligible where criteria are met
• Foreign income accepted for internal refinances only
• Clients with four or more investment properties should be credit pre-checked early
• Investment Interest Only lending is supported

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🏦 Better Choice — Unlimited Cash Out for Self-Employed Borrowers

Better Choice has highlighted its Alt Doc cash-out options.

Key points:

• Unlimited cash out up to 80% LVR under Prime Alt Doc
• Unlimited cash out up to 85% LVR under Specialist
• Business purposes accepted
• Only one form of income verification required
• Accountant’s letter, BAS or business bank statements accepted

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🏦 Bluestone — Investor, Trust & Company Lending

Trust and company lending

• Maximum LVR up to 90%
• P&I and IO available
• Full Doc and Low Doc options
• Other entity debts may be excluded if positively geared or self-managed
• No Independent Legal Advice required

Servicing

• Investment expenses factored within HEM
• Negative gearing benefit remains — confirm directly with Bluestone
• Can service solely on rental income
• Residential, commercial and short-term stay income assessed at 80%
• Eligible PAYG variable income accepted, including overtime, bonus, commission and allowances
• Buffer rate of 1.5% under 70% LVR
• Buffer rate of 2.0% above 70% LVR

Current offer

• 0.25% p.a. off eligible new Near Prime, Specialist or Specialist+ residential loans
• Applies to loans submitted from 13 April to 31 May 2026
• Loans must settle within six months

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🏦 Brighten — Empower Prime LVR Change & Servicing Niches

Brighten has reduced the maximum LVR for Brighten Empower Prime.

Key change:

• Maximum LVR reduced from up to 95% inclusive of LMI
• New maximum LVR is 80%

Brighten servicing and policy niches

• Existing debts assessed at 125% of actual repayments
• No DTI requirements
• New loans assessed with a 2% buffer
• Dollar-for-dollar Easy Refi 1% buffer available for Alt Doc and non-resident borrowers only
• 90% rental income used
• 100% overtime, bonus and commission accepted, regardless of industry
• Business debts not expensed
• 90% net overseas income accepted for PAYG and self-employed borrowers

Self-employed options

• Alt Doc with one income verification only
• Prime owner-occupied Alt Doc with no risk fee
• Most recent year financials in isolation accepted, with 2025 financials required
• Company wages accepted in isolation
• No additional rate or fee buffers for company/trust borrowers

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🏦 Go Beyond by Thinktank — Related Entity Liabilities

Go Beyond by Thinktank has updated its approach to liabilities held in related entities for Residential deals. This update strengthens their approach to multi-SPV structures, while continuing to support complex scenarios.

What's Changing: SPVs / non-trading entities

• Liabilities must be disclosed
• Liabilities must be included in servicing
• Negative gearing may be applied - where eligible
• Statements generally not required, subject to further enquiries

Trading entities

• Accountant’s solvency letter required if seeking to remove liabilities from servicing

Company and trust lending remains a key focus for Go Beyond.

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🏦 Great Southern Bank — Negative Gearing Changes

Great Southern Bank has updated its negative gearing policy following the Federal Budget announcement.

This affects:

• New applications
• Current pipeline applications
• Pre-approvals

Investor applications

For established residential investment properties where the contract date is after Tuesday 12 May 2026, negative gearing will no longer be included in servicing.

This does not apply to:

• Established property with a contract dated on or before Tuesday 12 May 2026
• Eligible new-build investment properties

Eligible new build examples

• Newly constructed apartment bought off the plan
• Duplex constructed through a knock-down rebuild replacing a single free-standing house
• Residential construction on previously vacant land
• Newly built property occupied for less than 12 months before first sale

Refinance dollar-for-dollar

• Dollar-for-dollar refinance of a grandfathered residential investment property will be assessed using negative gearing for servicing

Refinance with cash out

• Negative gearing applies to the amount used to replace existing debt
• Negative gearing may also apply to additional funds used to improve the eligible property
• Other cash-out purposes will be assessed under current servicing

Owner-occupied converted to investment

Where a property was held on or before Tuesday 12 May 2026 and later converted from owner-occupied to investment, negative gearing may be used for servicing once the property is rented, subject to normal credit policy.

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🏦 Macquarie — Serviceability Calculator Update

Macquarie has updated its serviceability calculator from Tuesday 26 May 2026 to reflect the proposed Federal Budget negative gearing changes.

New rental income and tax deductions worksheet

For all investment properties held, brokers now need to include:

• Loan balance, not loan limit
• Tax deductibility eligibility
• Annual rental income
• Annual property expenses
• Ownership percentage for each applicant

Interest expense deductions

• Interest expenses can continue to be deducted from rental income
• Grouping/pooling across multiple investment properties held in the same name remains available
• Annual rental income must be verifiable
• Calculator will pre-populate rental income and expenses into the main serviceability worksheet

ApplyOnline

• ApplyOnline may not yet reflect Macquarie’s updated negative gearing approach
• Use Macquarie’s calculator as the final serviceability check
• If an NSR validation warning appears in ApplyOnline, the application can still proceed if it passes using Macquarie’s updated calculator
• Brokers must use the latest calculator dated 25 May 2026

Client reminder

• Customers are responsible for confirming ongoing eligibility for any negative gearing benefit included in the application
• Customers should seek their own tax advice

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🏦 ME Bank — CAT Update & HEM Changes

ME Bank has also updated its Credit Assessment  (serviceability) Tool following the quarterly HEM update.

Changes apply to servicing calculations from Monday 25 May 2026.

New Securities Ownership section

The new Securities Ownership section in the Loan Tax Deductions tab should be used where:

• Ownership differs across applicants
• Tax treatment differs across securities
• There is mixed owner-occupied and investment lending

In-flight applications

• Applications submitted before Monday 25 May continue to be assessed using the existing CAT
• If no unconditional approval or AIP is held by the next HEM update, expected August 2026, the application will be assessed using the updated 25 May 2026 HEM values

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🏦 MyState — Fixed Rate Lock Requirements

MyState has provided a reminder on fixed rate lock requirements.

Key points:

• Fixed rate lock requests must be submitted at the time of the original loan application submission
• Applicable fee must be paid at the time of request
• Requests must be submitted using the Fixed Rate Lock Request/Acknowledgement form
• Payment must be received before any rate change announcement
• Fixed rate lock fee is $395 or 0.15% of the loan amount, whichever is greater
• Provides a 90-day rate lock from the date of application
• Fee is refunded if the loan does not proceed to settlement
• Rate lock is not available on pre-approvals
• Rate lock may be accepted once a contract of sale has been secured

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🏦 NAB — Negative Gearing Update

NAB has updated its serviceability assessment approach for new purchases based on contract execution date.

Contract on or before 12 May 2026

• NAB will continue to assess the application with negative gearing applied

Contract after 12 May 2026

• If the application was unconditionally approved by close of business Tuesday 26 May 2026, NAB will proceed without reassessment
• If not unconditionally approved by close of business Tuesday 26 May 2026, NAB will reassess the application
• Negative gearing will only apply if the property meets NAB’s new-build requirements

Eligible new build examples

• Newly constructed apartment bought off the plan
• Duplex constructed through a knock-down rebuild replacing a single free-standing house
• Residential construction on previously vacant land
• Newly built property occupied for less than 12 months before being sold

Non-eligible examples

• Established property recently extended to add bedrooms
• Free-standing house constructed through a knock-down rebuild replacing an older free-standing house
• Granny flat built beside an established property that is not eligible for gearing
• Newly built property occupied for more than 12 months before being sold to a subsequent investor

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🏦 ORDE Financial — EOFY Policy Highlights

Current ORDE niches

• SMSF Residential up to 80% LVR — application fee waived
• SMSF Commercial up to 65% LVR — application fee waived
• SMSF above or below the line servicing available
• Commercial promo: 0.30% reduction on prime rates
• Residential Alt Doc Construction up to $5 million
• ATO debt accepted on prime
• No Comprehensive Credit Reporting
• No clawback

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🏦 Resimac — ATO Debt Refinance

Resimac may consider ATO debt refinance and debt consolidation under Prime Full Doc and Alt Doc on an exception basis.

Assessment focus

• Whether the tax debt was a one-off event
• How the debt occurred
• What steps have been taken to prevent it happening again
• Overall strength of the application

Required upfront

• Completed servicing
• CCR confirming no additional adverse credit issues
• Completed exception template

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🏦 Suncorp Bank — Negative Gearing Changes

Suncorp has updated its negative gearing approach following the proposed Federal Budget changes.

Key points:

• Properties purchased after 12 May 2026 at 7:30pm AEST will only be eligible to use negative gearing in Suncorp’s serviceability assessment if they meet the definition of a new build
• Applications not unconditionally approved by close of business Wednesday 27 May 2026 will be reassessed
• Negative gearing will only apply if the property is eligible

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🏦 Teachers Mutual Bank Limited — Rate Lock & Offset Update

Rate lock fee

From 23 May 2026, TMBL has reduced its rate lock fee:

• Old fee: 0.15%
• New fee: 0.10%

TMBL has also removed its arrears administration fee.

Your Way Plus multiple offset facility

• Up to eight eligible transaction accounts can be linked to an eligible home loan as offset accounts
• The owner of the transaction account must also be the borrower, or one of the borrowers, of the home loan
• First offset account is linked in time for settlement
• Additional eligible accounts can be added post-settlement
• Available to new and existing eligible home loans

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🏦 Ubank — Rental Shading & 1% Buffer Policy

Ubank has has historically not relied on negative gearing in servicing calculations, instead using a rental shading approach.

Rental income assessment

• Uses 90% of gross rental income
• No tax applied
• 10% property cost applied automatically in the calculator once annual rent is entered

Handy Hints

• Shading is applied automatically when using the rental field
• If the purchase COS shows property expenses above 10%, this may override the default
• For refinances, Ubank generally relies on declared expenses

ARA 1% buffer policy

Ubank’s ARA 1% buffer policy may assist suitable refinance clients. This is a great option for clients who may feel stuck in their current loan.
Just to be clear,  this is not a fast refinance, but rather a targeted tool to help eligible customers move. 

Key criteria include:

• DTI less than 5
• Demonstrable rate improvement with Ubank
• Dollar-for-dollar refinance
• Cannot refinance from NAB Group
• Strong and clean credit history

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Final Broker Takeaway

This week’s key themes are:

• Negative gearing changes are now flowing through lender calculators and policy
• Contract date and unconditional approval date are critical
• New-build definitions differ slightly by lender, so check policy before lodging
• Some lenders are still offering strong pathways for investor, company and trust borrowers
• ATO debt does not always mean Specialist lending
• 1% buffer refinance options may help strong clients who are stuck
• Calculator versions matter, make sure you delete old versions and use the latest lender tools

This is one of those weeks where the detail can make or break the deal.

That's it from Little KP today 😉...Have a cracking week, see you next Monday finance friends. 💛