ANZ Fixed Rate: The Success Secrets of a Successful Record Review

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1 15 March 2012 In this issue Message from Meg Latest news Thanks for backing us ANZ Fixed Rates Earn CPD points through ANZ s best practice broker series online now Refinance statements now acceptable up to 60 days Easter cut-off times Reminders New Breakfree Pricing OFI refinance queries change of contact Interest Only extension requests made easier Settlements in regional QLD change of location and timing Message from Meg Hi everyone, I want to start off by thanking you for your support in the recent MFAA Awards, in giving us the honour of this year's Lender of the Year. As we enter our 15th year of supporting the broker industry, this is a particularly proud moment for all of us here at ANZ. You know us well, and you know we won't rest on our laurels. For 2012, we have lots more planned, and we're already eyeing off back-to-back wins! I also want to take a quick moment to talk rates. Over the last few years, ANZ has been working to set standards in place for when we review rates. For two years now, we have been working to a weekly 'rhythm' for fixed rates, whereby we review them every Thursday afternoon, effective Friday morning. And in December, we announced our process for variable rates, reviewing the second Friday of every month, effective 10 days later. In a volatile market, we know that certainty around timing is important so that you can manage your customers expectations accordingly. For ultimate certainty, you also have the options of using our Lock Rate facility - a simple flat fee that guarantees the rate you talked to the client about today is locked in for the next 90 days. Check out the details below for a reminder of how lock rate works. In the meantime, thanks again for your support and thank you for choosing ANZ.

2 Latest news Thanks for backing us. Thanks to you, ANZ has been recognised as Lender of the Year at the 2012 MFAA Excellent Awards. These awards were based on the votes of our broker partners around Australia, so from all of us at ANZ, we d like to say Thank You for backing us. We look forward to continuing to work with you in 2012, to make sure choosing ANZ is a great experience every time for you and your customers. ANZ Fixed Rates Given the current environment and the increasing number of customers opting to fix part or all of their loan, we d like to give you some insight into how fixed rates are set at ANZ, and give you a refresher about ANZ Lock Rate and Early Repayment Costs processes. How are fixed rates calculated at ANZ? Fixed rates are set based on a combination of funding costs, competitive positioning, customer impact, and depositor / investor returns Fixed rates are also impacted by the ability to hedge interest rate risk in the market on a daily basis Based on these factors, fixed rates may move repeatedly over successive weeks, or may hold for several weeks at a time Advance warning of a fixed rate change is not possible, as it can create significant risks with interest rate hedging strategies When does ANZ announce changes to fixed rates? ANZ home loan fixed rates are reviewed weekly every Thursday afternoon. Changes that are made are effective the following day. To avoid interest rate increases impacting your customers, we recommend that you discuss lock rate options at application stage, to establish your client s fixed rate requirements and avoid disappointment. We also recommend that you check anz.com every Friday morning to ensure you are aware of any rate changes. ANZ Lock Rate For ANZ Fixed Rate loans, the interest rate is set at settlement (not application) unless the rate is locked. ANZ Lock Rate allows customers to lock in a fixed rate for up to 90 days from when the Lock Rate fee is processed (i.e. when the fee is successfully processed against the customer s account). ANZ Lock Rate effectively safeguards our customers against increases in fixed interest rates for that product during the 90 days. When is ANZ Lock Rate available? ANZ Local Rate is available with the following products: ANZ Fixed Rate Home Loans, ANZ Fixed Rate Residential Investment Loans and ANZ Fixed Rate Loans in a Company Name A flat Lock Rate Fee of $ applies ($750 per loan or loan split if under the same application number) Standard Loan Approval Fee also applies Maximum loan amount $1,000,000 Maximum lock rate period is up to 90 days from when the Lock Rate fee is processed Maximum initial fixed rate term is 5 years (lock rate is not available for 7 or 10 year terms) No capitalisation of security fees or bank fees is available. Capitalisation of LMI is acceptable Lock rate may now be used in conjunction with interest rate discounts including pricing discretions and the Breakfree package fixed rate discount Progressively drawn / construction loans do not qualify for ANZ Lock Rate

3 Helpful hints Make sure that the ANZ Lock Rate Payment Authorisation form is completed in full and is signed by the customer Ensure that the credit card or debit account details are correct on the form. Where payment cannot be processed due to insufficient funds or incorrect details, ANZ will be unable to lock the rate. The completed ANZ Application Kit and supporting loan documentation must be received before midnight (local time) on Thursday, otherwise the following day s rate will apply in the event of a rate change. Within the ANZ Application Kit, clearly indicate that the customer is selecting the Lock Rate option in sections 1 and 2.5. If there are multiple fixed rate loan products within the one application, please ensure that a completed form is received for each individual fixed rate loan product. EG two fixed rate products = two lock rate forms. Once the payment has been made, ANZ will confirm via fax that the payment has been processed and the rate is locked. If you do not receive a fax confirming payment, please speak to your BDM. Lock Rate form To access the current Lock Rate form and further process details, go to > Application Kit/Forms Early Repayment Costs During all fixed rate discussions, customers should be made aware that Early Repayment Costs (ERCs) may apply with fixed rate loans if they: Pay off some or all of their fixed rate loan early, or Switch to a loan with a new, lower fixed or variable interest rate before the end of the current fixed term. They should be made aware that these actions may cause an ERC to be incurred, that the amount of the ERC can vary and that an ERC can be high, depending on how long the fixed rate term has to go. So fixed rates are clear and transparent for our customers, please hand out the following brochure to any customers who enquire about ANZ fixed rate loans: ANZ Fixed Rate Loans: What happens if you repay some or all of it early? Available on > Application Kit/Forms > Additional Forms Questions? Contact your ANZ BDM Earn CPD points through ANZ s best practice broker series online now Earlier this year ANZ announced its partnership with The Adviser to help provide specialised business support and professional development to brokers through the ANZ Business Leaders Boardroom Series. The first webinar on business planning is now available on The Adviser s website. You can receive 2 CPD points for completing the online session. It will only take you around 45 minutes - you ll get tips and guidance on how to grow and manage your business and at the end of the session you ll have your own business plan. Stay tuned for other topics that will be rolled out throughout the year including recruitment and retention, mentoring/coaching and networking.

4 This initiative is another way we are backing you up and supporting professional development in the industry. Start the business planning webinar now. Refinance statements now acceptable up to 60 days Effective immediately, bank statements to verify account conduct for refinance applications will be accepted up to 60 days from the date of the statement of financial position. Either original or internet statements are acceptable. Easter cut-off times To ensure we meet our customers requirements in the lead-up to the Easter break (Thursday, 5 April 2012), please follow these cut off times to ensure settlements and other releases are completed in time: New Loan Applications with a settlement date prior to and including 5/04/2012 must be unconditionally approved by close of business 23/03/2012 New Loan Settlements - All documents for applications that require settlement by 05/04/2012 must be returned to the required Document Return address by 5 business days prior to settlement. Discharge/Sales Settlement requests must be submitted to Fulfilment and applications with a settlement date prior to and including 5/04/2012 must be unconditionally approved by close of business 23/03/2012. Nil Debts, Security Variations and Production of Title requests must be submitted to Fulfilment and applications requiring a Refinance from an OFI must be unconditionally approved by close of business 16/03/2012. Note: Please factor in the time it takes for the existing lender to get ready for the settlement booking. Some lenders can take between days as a minimum, so make sure you send the discharge authority to the existing lender as soon as possible to reduce pressure for you and your customer Questions? Contact your ANZ BDM

5 Reminders

6 New Breakfree Package pricing New great pricing with ANZ Breakfree Package is now available. The fixed rate discount of 0.15%p.a. under the ANZ Breakfree Package is now a standard discount benefit PLUS we have new variable rate discounts on offer. As you are aware, our Breakfree Package special offer expired yesterday, Wednesday 29 February Effective 1 March 2012, ANZ is offering the following new discounts under the Breakfree Package until further notice for: Existing customers who apply for additional Mortgage lending of $100,000 or more and have an existing ANZ Breakfree package, or New customers who apply for new Mortgage lending of $250,000 or more under the ANZ Breakfree package: The detail Discounts are based on the Loan to Value Ratio (LVR) of the new loan application and applied to total mortgage lending. ANZ Credit Assessment will add the appropriate discount to the current application based on the LVR. Total mortgage lending is defined as all mortgage lending your customer holds with ANZ. Discounts are not available on existing Simplicity PLUS, Money Saver, Easy Start, Loans in a Company Name or ANZ Portfolio. This new Breakfree special offer replaces all previous Breakfree special offers (October 2009 to February 2012). New ANZ Breakfree pricing tiers have been introduced for this special offer. Standard Breakfree pricing tiers apply for non eligible lending. The ANZ Simplicity PLUS Special Offer expired on 29 February Applications submitted on or from 1 March 2012 will receive the carded rate. Questions? Contact your ANZ BDM

7 Interest only extension requests made easier Effective 19 March 2012, interest only extension requests will be introduced to the current Non Credit Critical (NCC) process. This will make the process faster and more convenient for eligible customers seeking an interest only extension, and the best part is that there will be less paperwork. What you need to do Please be aware of the process and requirements for your customers to qualify for an interest only extension under NCC: Process Simply refer your customers to their local ANZ branch and ANZ branch staff will take care of the rest. Requirements for customers to qualify for an interest only extension Your customer must have an existing interest only loan with ANZ. If they have an expired interest only loan, expiry must have occurred within the last 6 months Your customer needs to extend their loan term by the same period as the interest only term (maximum 30 year loan term). For example, if your customer has a 15 year loan term and wants to extend their interest only term by 2 years, they would also need to extend the remaining loan term by 2 years IE to 17 years. The loan must not exceed 10 years Interest Only on their loan in total The loan can t have ANZ Lenders Mortgage Insurance The customer must understand and have discussed the staff declarations in the NCC checklist with the Lender, (this will be completed by ANZ branch staff); and The customer needs to meet all other NCC eligibility (as per current process) Questions? Contact your ANZ BDM Settlements in regional QLD change of location and booking times Effective 12 March 2012, all Queensland settlements - including those currently taking place in ANZ offices and branches - will be attended by SAI Global or their agents. What s changing All settlements occurring outside of the Brisbane CBD should be booked no later than 4:00pm two business day prior to the settlement date. For release settlements, new settlement locations will be confirmed at the time of booking. For purchase settlements: cheque/disbursement directions should be provided by fax to no later than 10:30am on the date of settlement What s not changing There is no change to the enquiries and settlement booking phone number This phone number will continue to be managed by ANZ s National Fulfilment Enquiries team. SAI Global will continue to attend purchase settlements on ANZ s behalf in the metropolitan and larger regional centres of Queensland as they have for several years.

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