The key implication: mortgages originated to company and trust structures will face tougher scrutiny, longer verification cycles and potentially higher pricing, compressing conversion rates for brokers and raising the cost of capital for SMEs and property investors. In a slower growth environment — as ANZ itself noted, “Slower economic growth too translates into slower growth in bank lending” (ANZ, 29 June 2023) — the bank’s tighter stance is a pragmatic risk calibration rather than a retreat from housing. But the ripple effects will re-shape deal structures, lender competition and fintech opportunity over the next 6–12 months.

Market context: a cautious turn among majors

ANZ’s move lands amid a broader tightening trend on complex borrower types. Commonwealth Bank updated policies for company and trust borrowers in late 2025, signalling system-wide caution on layered liability, income verification and enforcement complexity. Brokers report the big four are selectively de-risking exposures tied to corporate vehicles used for investment or cashflow management, a cohort that can carry higher operational and legal risk than standard PAYG borrowers.

Macro doesn’t help. With growth moderating, the lending pie isn’t expanding rapidly. ANZ’s own commentary last cycle underscored the link: slower GDP growth tends to dampen loan growth. In that environment, shifting the portfolio mix towards lower-loss, capital-efficient assets becomes a straightforward RAROC decision. For company-borrower mortgages, expected loss is harder to model and recovery pathways can be slower, pushing up economic capital and reducing relative returns.

Business impact: cost of capital, execution friction, and ROI

For SMEs and family offices using companies to hold residential assets, three impacts are likely:

• Higher effective hurdle rates: Tighter policy often comes with lower maximum LVRs and stricter serviceability assumptions, requiring more equity and pushing IRR down on geared strategies.
• Longer time-to-yes: Enhanced due diligence on corporate structures (directors’ guarantees, beneficial ownership, intercompany cashflows) extends approval timelines, which can jeopardise time-sensitive transactions.
• Documentation load: Expect deeper dives on financial statements, tax filings, related-party loans and dividend policies, plus alignment of personal and business liabilities.

For brokers, the operational throughput will dip before it improves. Pipelines need re-segmentation by borrower type; pre-screen discipline must lift; and lender panels should be recalibrated to reflect who is still open for business on corporate borrowers — including non-banks with risk-based pricing.

Competitive dynamics: openings for non-banks and fast followers

When a major tightens, three competitive plays usually emerge:

• Non-banks and specialist lenders step into the gap, offering bespoke covenants, cashflow underwriting and risk-based pricing. Margins are higher, but so are operating costs and funding risks. For those with stable warehouse lines and prudent securitisation pipelines, this is an attractive wedge.
• Regional and mutual banks can selectively compete on relationship banking for trading businesses with clean financials, using faster turnaround times as a differentiator.
• Fast followers among majors may adopt targeted relaxations (e.g., for low LVR, highly liquid borrowers) once loss data stabilises. Conversely, others will mirror ANZ, creating an informal industry standard.

Case in point: policy shifts at Commonwealth Bank in 2025 on companies and trusts showed how quickly settings can converge across the oligopoly, pushing incremental volume to challenger segments rather than shifting market share within the majors.

Technical deep dive: why company borrowers are harder to model

Mortgages to companies carry structural and model risk beyond individual PAYG borrowers:

• Legal enforceability: Recovery often relies on directors’ guarantees and complex collateral packages; enforcement timelines and costs are higher.
• Income volatility: Business cashflows are cyclical; serviceability can be obfuscated by related-party transactions or retained earnings policies.
• Data quality and lineage: Underwriting requires multi-entity financials, UBO verification and cross-liability mapping — a heavier AML/CTF workload and higher model uncertainty.

Technology can help. Advanced decisioning integrates entity-resolution, bank-statement analytics and stress-testing across consolidated groups. But Australian banks operate under emerging AI governance expectations; the government’s 2019 AI Ethics Principles and its 2024 interim response to AI consultation reinforce the need for transparency, contestability and fairness in automated decisions. For lenders, that means explainable credit models, audit trails and bias testing — precisely the guardrails that slow deployment but bolster trust and regulatory comfort.

Implementation reality: a playbook for lenders, brokers and borrowers

Practical steps that work:

• Segmentation and pricing: Split company borrowers by complexity: operating companies with volatile cashflows versus passive SPVs with ringfenced collateral. Apply differentiated LVRs, DSCR thresholds and covenants.
• Pre-emptive documentation: Borrowers should prepare full-statement financials, tax returns, intercompany loan agreements and a clear dividend policy. Personal guarantees, if requested, should be aligned across directors to avoid bottlenecks.
• Broker triage: Implement hard pre-screens for UBO, existing debt stacks and cashflow coverage; book valuations early to avoid settlement delays.
• Model governance: Adopt explainable features for corporate borrower scorecards, with periodic challenger models and backtesting — aligned to Australia’s AI ethics guidance.

These measures shorten time-to-yes without diluting underwriting discipline, protecting NIM and broker productivity in a tighter-credit regime.

Risk, returns and capital: a RAROC lens

From a risk-adjusted return perspective, company-borrower mortgages elevate uncertainty around loss given default and time-to-recovery. Even if headline arrears remain manageable — Fitch’s Dinkum index historically tracks mortgage performance and has highlighted the link between slower economic growth and lending momentum — the tail-risk profile is fatter for complex structures. Tightening policy modestly reduces expected loss and capital intensity, improving RAROC without materially shrinking total volumes, especially if lenders reweight toward lower-LVR, simpler exposures.

Future outlook: two scenarios to watch

Base case (stability): If employment remains resilient and household cash buffers persist, majors maintain tighter settings into FY26, with selective easing for low-LVR, high-transparency company borrowers. Non-banks gain share in niche segments, and broker channel mix shifts incrementally.

Downside (stress): If arrears drift up or enforcement timelines lengthen, expect broader harmonisation of tough settings across the majors, higher pricing for complex deals and more demand migrating to specialist lenders. Lenders accelerate investments in data lineage, explainable AI and portfolio surveillance to defend asset quality.

ANZ’s global footprint across 29 markets suggests the bank can redeploy balance sheet towards internationally diversified, capital-efficient business lines while pruning higher-friction domestic niches. For Australian borrowers and brokers, the message is simple: complexity now carries a premium — plan for it, or pay for it.

What leaders should do now

• CFOs/owners: Simplify structures where possible, lock in lower LVRs, and strengthen DSCR. Model IRR sensitivity to higher equity contributions and longer approval cycles.
• Brokers: Re-benchmark lender panels for company borrowers; double down on pre-screening and document readiness to preserve conversion rates.
• Lenders: Invest in entity-resolution, explainable credit models and AI governance aligned to Australia’s ethics principles; pursue granular risk-based pricing to retain prime segments without raising portfolio loss volatility.