Document ID: chunk:federal_register_of_legislation:F2023L00410:body:0:p9
Version: federal_register_of_legislation:F2023L00410
Segment Type: other
Provision Reference: 
Character Range: 24600–28029

sections 17A and 17B of the Superannuation Industry (Supervision) Act 1993.

Definitions of measures of loans

Borrower's gross income              Borrower's annual before tax income verified by an ADI, excluding any compulsory superannuation contributions and before any discounts or haircuts under the ADI's serviceability assessment policy.

Credit limit                         The maximum amount of funds available to the borrower without additional authorisation or approval. This amount should include the credit outstanding and any other funds that can be drawn without additional approval by the lender.

                                     For term loans, report the amortised value of the loan, gross of offset accounts.

                                     For revolving credit facilities, any amounts in a net-deposit position should not add to the credit limit.

Credit outstanding                   The balance owed by borrowers at the end of the reporting period (including capitalised interest or fees). The credit outstanding is the original loan amount, less any repayments, plus any redraw facilities drawn.

                                     The balance should be reported gross of provisions. Do not net any deposit balances in offset accounts against the outstanding loan amount.

                                     For revolving credit facilities, report the drawn amount.

Debt-to-income ratio                 The ratio of the credit limit of all debts held by the borrower, to the borrowers' gross income.

                                     Include the credit limit of any debts, such as other mortgage lending, personal loans, credit-cards, consumer finance, margin lending, buy now pay later debt, Higher Education Loan Program (HELP) or Higher Education Contribution Scheme (HECS) debt, and any other debts held by the borrower, to any party, to the extent this is known to the ADI.

Loan serviceability assessment rate  The interest rate used in the ADI's serviceability assessments, such as an interest-rate floor or actual interest-rate rate plus interest-rate buffer. Loan serviceability rate does not consider other serviceability factors such as discounts or haircuts to income.

Loan-to-income ratio                 The ratio of the credit limit of the loan to the borrower's gross income.

Loan-to-valuation ratio (LVR)        As defined in and calculated in accordance with paragraph 14(p) and Attachment A of Prudential Standard APS 112 Capital Adequacy: Standardised Approach to Credit Risk (APS 112).

Definitions of loan types and characteristics

30-89 days past-due                                  Loans that are at least 30 days past-due but less than 90 days past-due, whether or not the loan is well secured or non-performing. This should be based on the original contractual terms of the loan, not restructured terms or temporary concessions.

Amortising                                           Loans on which interest is paid and principal is automatically amortised. Also known as principal and interest loans.

Exceptions to serviceability policy                  Loans approved either with negative serviceability, below the ADI's serviceability threshold or that have been granted other credit policy waivers related to serviceability. Include loans:
                                                          * with net income surplus less than $0 or below