Assessment turnaround times have blown out again at ANZ, with some home borrowers having to wait almost six weeks for the bank to evaluate their loan applications.
ANZ told brokers in a notification sent on Tuesday that assessment times for owner builders and loans above A$1.75 million had increased to 27 business days.
This is sharp rise on the average turnaround for the same types of loans from last week when the bank reported it was taking 22 business days to complete assessments. In early August ANZ was assessing such applications within 11 days.
ANZ is also struggling to evaluate applications requiring mortgage insurance, which according to the latest notification are taking three weeks (15 business days) to finalise.
Applications requiring mortgage insurance were taking 12 business days to assess a week ago and only six business days at the start of August.
Fluctuating turnaround times this year have eroded broker support for ANZ’s mortgage products which has contributed to a marked slide in market share.
The bank’s mortgage book contracted by more than $1 billion to $262 billion in July – confirming a calendar year trend of negative growth.
At the start of January ANZ had $262 billion of Australian home loans sitting on its balance sheet, meaning the bank's mortgage book was static over the first 7 months of the year, a period in which all banks added around $70 billion in mortgages.
While the latest blowout in borrower waiting times raises many questions about the effectiveness of the bank’s effort to “automate” loan assessments, it could also be an indication that volumes began to recover this month.
However, any such volume recovery would likely be short-lived unless the bank is able to restore average turnarounds on applications to the levels reported in early August.
ANZ appears to be giving priority to PAYE loan applicants able to stump up a deposit of more than 20 per cent on intended home purchases.
The time taken by the bank to assess such applications has held at six days throughout September.
Lenders such as Macquarie and Bendigo Bank have taken market share from ANZ this year by leveraging automated and semi-automated assessment platforms that have dramatically reduced borrower waiting times to less than a week.
In recent months ANZ has removed some lending restrictions that were introduced at the height of the first wave of the pandemic last year.
In August the bank announced that it would start accepting applications from apartment buyers in Brisbane and Perth who required mortgage insurance.