BOQ BROKERSERVICEABILITYWORKSHEET GUIDE Version Number: 10.3 Effective Date: 2 March 2020

Serviceability Worksheet 1

Important! Before you start: 1

Validation completed: what’s next? 1

The Serviceability Worksheet 1 – Self Employed/Company Income 2

The Serviceability Worksheet 2 – Personal & Rental Income 8

The Serviceability Worksheet 3 – Debt Servicing 15

The Serviceability Worksheet 4 – Negative Gearing Calculator 20

TABLE OF CONTENTS

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SERVICEABILITY WORKSHEET

The purpose of this guide is to specify the core requirements for completing a serviceability worksheet. The worksheet measures the applicant’s ability to service new and existing debt based on their income and expenses.

Introduction

Brokers must always avoid the following items when completing a serviceability worksheet:

• Overstating income; (e.g. by using unacceptable or non-validated income)• Neglecting liabilities • Misrepresentation of data• Using out-dated versions of the serviceability worksheet.

Before starting, check that you have, for each borrower:

• Validated income and expenses as per credit policies, and• Located and investigated liabilities.

Reliance on any form of income or add back outside BOQ policy is subject to BOQ review and approval.

There are four worksheets within the serviceability worksheet for Brokers to use. An explanation of each worksheet is provided in the worksheet introduction.

• Self Employed • Personal & Rental Income • Debt Servicing• Negative Gearing Calculator

Tip: If required, there are ‘add or remove’ buttons located in various sections of the serviceability worksheet.

Important! Before you start

When you open the worksheet, a security warning may appear below the toolbars. Click on ‘Enable Editing’ and or ‘Enable Content’ to allow the macros to run, or the worksheet will not calculate properly.

Validation completed: what’s next?

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This worksheet is only used if the applicants are self-employed individuals, company, partnership, or trust. If the applicants are PAYG taxpayers then proceed to the ‘Personal & Rental Income’ worksheet.

Information to complete this part of the serviceability worksheet is obtained from the accountant prepared Profit and Loss statements (P&L) and/or tax returns. If there are differences between the two, always use the tax returns. Input the figures for the current financial year and previous year/s.

Always start at the top of the Self Employed worksheet. If financial data is input before selecting the entity type, the worksheet will not calculate income in the Personal & Rental Income worksheet.

THE SERVICEABILITY WORKSHEET 1 - SELF EMPLOYED/COMPANY INCOME

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Application Number and Date

Input the details at the top of the worksheet. These details will automatically populate into other worksheets. The date will format to Date/Month/Year.

For example: Input date as 11/8/14 – it will display as 11 Aug 2014.

Tip: To add or remove additional self-employed tables, use the ‘Add’ and ‘Remove table’ buttons.

Trading Name

Input the full and correct legal entity name. If the entity trades as a different name, include the trading name.

For example:

• ABC Pty Ltd t/as ABC Educational tools. If the applicant operates through a trust structure, input the name in the format of ‘Trustee ATF the Trust t/as Trading Name.

• ABC Pty Ltd ATF the John and Mary Smith Family Trust t/as ABC Educational Tools.

Entity Type

Select from the drop down options the correct entity type for the applicant. If the entity type is not selected, figures will not calculate correctly.

Note: If Sole Trader is selected, the worksheet will automatically adjust the Salaries/Distribution field to reflect a Sole Trader.

Sales/Income, Cost of Goods Sold,

& Other Income

This information is obtained from the applicants P&L statements or tax returns. Where there is no value for the Sales/Income field input “0” to enable the worksheet to calculate correctly.

ExpensesInput the figures as shown on the P&L statements or the tax returns for the current financial year, and previous year/s (where the figures are inconsistent the tax returns should be used).

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Select from the drop down options the correct description of the income/distribution.

Non-Recurring IncomeCompanies only. For example: Income from a capital gain or sale of an asset.

Company Dividends Distribution

If the company pays dividends, and the dividend has been paid; deduct these payments here as the dividends will be added back under the individual’s income.

Sole Trader ProceedsTrust Distribution

Partnership Distribution

When selecting these types, input the corresponding value from the above NPBT (Net Profit Before Tax) cells to result in the NPAT (Net Profit After Tax) figure being $0.

Distributions from this source should be accounted for under Salaries/ Distributions in the Director’s Income fields.

Tip: DO NOT input non-applicant director’s salaries/profits here.

Other If ‘Other’ is selected, ensure the income/distribution is explained.

Company Tax

Company tax is calculated at either 27.5% or 30%. If tax rate unknown, utilise 30%.

Note: Where a company pays dividends the company tax is calculated on the NPBT amount, before any dividends are factored in.

Add Backs

Depreciation

Depreciation represents the systematic allocation of the original cost of a fixed asset over its useful life. As depreciation is a book entry only (i.e. a non-cash expense) the depreciation figure can be added back to the net profit for serviceability purposes. Where depreciation forms a large proportion of income Risk Assessment may question the use in repaying debt.

Interest PaidNote: To add back interest for a debt that has since been fully repaid, written confirmation from the financier or accountant must be held confirming debt is fully repaid or limit closed.

Leasing Charges The finance lease expense can be added back provided that the related lease commitment is included on the ‘Debt Servicing’ worksheet.

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Salaries & Distributions

Self-Employed Salaries/Distributions

If the applicant is a self-employed individual or partnership, generally the applicant will take any profit earned by the business as their personal income. In most cases, the figure from the personal tax returns would be entered.

Select from the drop down options the correct description for each applicant.

Director: A person who is a director of a company; Sole Trader: A person who trades as a Sole Trader;Beneficiary: A beneficiary of a trust;Partner: A person owning a share of a partnership.

The worksheet will automatically calculate the tax payable and populate the tax figure into the ‘Personal & Rental Income’ worksheet once the salary/distribution fields have been entered.

Where there are multiple self-employed entities, ensure that the applicant number remains consistent throughout all tables to ensure correct calculation of personal income tax in the ‘Personal & Rental Income’ worksheet.

Important Note: Only input director’s salaries, trustee, partners, or trust beneficiaries’ income here, where the individual is a loan applicant. If the individual is not an applicant the income cannot be used.

% Share of Entity

Input the % share of entity the applicant has. No input is required for discretionary trust. If the applicant is a sole trader the share will default to 100%.

Note: Do not include income twice, by inputting the director/partners income in the self-employed worksheet, and then adding it again as salary in the ‘Personal & Rental Income’ worksheet. If 2 years of director’s salaries are being input, the 3rd year should be left blank i.e. do not input “0”.

Applicant No.

Select from the drop down options the corresponding applicant number.

It is essential that the applicant number is used as this allows the worksheet to correctly calculate income in the Personal & Rental Income worksheet.

The options available defaults to four (4) applicants. To add additional applicants in the ‘Self Employed’ worksheet go to the ‘Personal & Rental Income’ worksheet and click on the ‘Add Applicant’ buttons located at the top.

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Franking Credits Franking credits are allocated by the applicant’s accountant on a case by case basis, year on year depending on a number of different factors specific to both the individual’s business and the individual applicant needs in the financial year. Use of franking credits is subject to Risk review and approval.

1. Self-employed applicants or applicants in receipt of dividends from a PTY LTD (private company)

1a. PAYG income + Dividend income + franking credit can be added in the ‘Salary/Distributions -Directors’ section for the relevant financial year. The average will be applied and the amount calculated will appear in the Personal & Rental Income worksheet as part of the taxable income, providing tax advantage to the applicant.

2. Dividends from LTD (Public Company)

2a. The lowest of the last two years individual tax return. Add franked dividend + unfranked dividend + franking credit amounts and input in the ‘Dividends’ section in the Personal & Rental Income worksheet.

Important: In all instances, Retail or Business Credit Risk Managers have the discretion to determine whether the franking credits can be utilised. These include, but are not limited to: whether the franking credit is likely to continue at that level for the life of the loan, the balance of the franking credit account, historic franking credits, loan type and overall risk profile of the applicants.

Director’s Superannuation (Super)

Where wages or salaries are paid super payments are a mandatory legislative requirement and currently set at 9.5% of wages. If directors are paid a higher super amount than required by legislation the excess between the current legislative requirement and the amount paid can be added back subject to validation.

Tip: The tax return of the company or the Profit & Loss statement will confirm additional super contributions made.

Other Add backs Refer to the applicable credit policies for policy requirements relating to add backs. If other add backs are to be considered, the Broker must possess a thorough understanding of the applicants business and financial statements. This would be obtained from analysing the P&L statements, tax returns, and discussions with the applicants and/or their accountant.

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Extraordinary /One off Expenses

An abnormal/unusual expense incurred by the business, although not normally associated with the day to day business operations.

The following fields will automatically populate

Adjusted Profitability: This figure is automatically calculated as the average adjusted profitability figure from the data entered or the latest year, whichever is the lowest figure. It is mandatory that two (2) year’s tax returns are held to complete this.

EBIT – Earnings before Interest and Tax: This is calculated from the NPBT figure, plus the Interest Expense and/or Leasing Charges figure.

Interest and Leasing Expense: This is the total of the figures entered in the Interest and Leasing expense fields.

Interest cover ratio: This is calculated as a percentage (%) of the EBIT divided (/) by the Interest and Leasing Expenses figure. This ratio indicates the entity’s ability to meet interest payments on outstanding debt.

Note: If there is no data entered in the ‘Interest or Leasing Charges’ fields under add backs, the interest cover ratio percentage will not calculate.

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This worksheet is used for Personal and Rental Income, and the calculation of living expenses. Complete this worksheet where the applicants are PAYG taxpayers.

For PAYG and where the Self Employed worksheet has been used, Brokers need to complete the following fields in this worksheet in order to calculate the living expenses for individual applicants and guarantors:

• Customer Name;• Customers Postcode;• Relationship Status;• No. of Dependants; and• Any other additional income fields (such as non-taxable or rental income) where applicable.

Income sourced from rental property investments is also included in this worksheet.

Note: If rental income is already included in self-employed figures, it should not be duplicated here.

Information to complete this part of the serviceability worksheet is obtained from the applicant’s payslip, account statements, or Tax Assessment Notice.

For PAYG income earners where validation is from payslips, perform a test to see whether a surplus servicing position is evident on the base pay alone. If a surplus is shown, use the base pay only as this eliminates validation of additional PAYG income, such as overtime.

BOQ uses the HEM (Household Expenditure Measure) as a base line to calculate living expenses for applicants in each household. The HEM amount is based on:

• Household type -single/couple & number of dependants;• Geographical location (postcode); and• Household income.

The serviceability worksheet will apply the higher of the customer declared living expenses or HEM. Brokers must utilise the applicant’s regular living expenses disclosed in the Lending Application form for the completion of the serviceability worksheet.

THE SERVICEABILITY WORKSHEET 2 - PERSONAL & RENTAL INCOME

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Where there are two applicants who live in separate households, each applicant and household must be separated. For example:

• Mr Smith and Mr Brown are both borrowers.• Mr Smith lives in a separate household to Mr Brown and vice versa.• Mr Smith is applicant 1, and is Household 1.• Mr Brown is applicant 2 and is Household 2.

1. Input Mr Smith’s details as applicant 1, and click in the Customer Name cell for applicant 2, then

2. To the right of the worksheet click on the Remove Selected Applicant button. This will remove applicant 2 from Household 1, then

3. Input Mr Brown details as applicant 2 in Household 2.

For other joint applicants (e.g. siblings or friends) these should be treated as separate households even where they are living in the same household.

When all the required data has been entered, the worksheet will calculate the living expenses for each applicant and household.

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There are ‘Add’ and ‘Remove’ buttons located at the top of this worksheet.

Add Applicant button located above each household: - Adds a new applicant to the household.

Remove Selected Applicant: Use this if you need to remove an applicant from a household. Click on the Customer Name cell of the person to be removed, and then click on the Remove Selected Applicant button.

Add Household: Adds an additional household.

Remove Selected Household: Use this if you need to remove a household, by clicking on the household you wish to remove and then click on the Remove Selected Household button.

Reminder: If you have separate applicants and separate households, the Broker must ensure that the applicants are correctly listed within each household.

Customer name Input the first and last name of each applicant. The customer name will auto populate into the credit card section of the Debt Servicing worksheet, and the Negative Gearing worksheet.

Customer’s Postcode

Input the postcode of each applicant’s principal place of residence (PPR). If the applicants are purchasing a new PPR, then input the postcode of the property that is being purchased. For borrowers residing outside Australia the postcode 9999 is to be used.

Relationship Status

Select from the drop down options, the correct status type for the applicants.

If the applicant is married or in a defacto relationship, and the spouse or defacto is not an applicant to the loan then; the drop down option to be selected is ‘Spouse but not to an applicant’.

DO NOT use the status of ‘Single’, in this situation.

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No. of Dependants

Select the correct number of dependants from the drop down options.

The maximum number of dependants is ten+ (10+).

Where a 50/50 shared parental custody arrangement exists, the child must be included as a dependant.

Note: Any person reliant on the applicant’s income is considered a dependant. This includes an adolescent child, adult child (over 18), or a person in care with whom there is an interdependency relationship such as an elderly parent with no income.

Income Salary/PAYG: (Gross) Input the Gross yearly figure only, exclude any overtime, shift allowances or penalty rates, commissions or dividends and any other taxable and non-taxable income. This field is for the primary source of income.

If the applicant has a second job, then input the second job income in the Other Taxable Income field.

PAYG Income Details by Applicant: (Description) Input the name of the employer, and a description of how the income is calculated. See examples below.

• BOQ - base pay only. • Retiree - 80% of net income.

Casual PAYG IncomeEnter the gross amount (100%) of the income as a yearly figure. The worksheet will apply the required income shading.

Other PAYG Income:Enter the gross amount (100%) for the following income types. The worksheet will apply any required income shading.

1. Overtime, Shift Allowances and Penalties @100%

2. Essential Services - Overtime, Allowances and Penalties @100%

3. Commission @ 100%

4. Bonus@ 100%

For example: If the gross overtime amount is $10,000, enter $10,000 in the relevant Overtime field.

Other Taxable Income: Input income other forms of taxable income in this field, such as income from a 2nd job.

Other Taxable Income: (Description) Input the name of the employer where the other taxable income has originated from, and a description of how the income is calculated.

For example: BOQ – 2nd job @ 80%.

Non-Taxable Income: Where the applicant is receiving a component of their income as non-taxable the following practice is accepted:

• The amount of the non-taxable component is input as non-taxable income.

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Income continued

Child Support, Government Pensions, and Veteran Affairs Pension income is also input in this field.

Note: Where an applicant is receiving child support income, ensure that the dependant has been included.

Non-Taxable Income: (Description) Input the name of the payer or employer (where the non-taxable income) has originated from, and a description of how the income is calculated.

For example: Family Tax A&B @ 100%

Non Taxable income $

1,300.00 Non Taxable income description Centrelink Family Tax A&B 100%

Salary Sacrifice Some employers provide employees with salary sacrifice options. For serviceability purposes, only the following salary sacrifice options are acceptable:• A voluntary superannuation deduction can be utilised as gross income

provided; it is clearly identified as salary sacrifice on the payslip and is additional to the employer’s contribution.

For a novated lease (or other such salary sacrifice loan repayments), 1. The pre-tax payment should be annualised and this amount is to be

included as (i) Non-Taxable income; and (ii) The related lease/loan repayment payment is included in the “Debt Servicing” worksheet

2. Any post-tax lease payment including GST, or other salary sacrifice payment or expense should be included as a Leasing payment in the “Debt Servicing” worksheet.

Dividends Dividends: Input the gross amount of any dividends received at 100%.

Tip: Do not include dividend income twice. For example: where the dividend paid is from another entity within the borrower group, and that dividend payment is also included in the shareholder’s personal income, the dividend payment must be deducted from the business entity.

The following fields will automatically populate from either the data entered in the ‘Self-Employed’ Worksheet or from the data in the sections listed above.

Note: For Self Employed individuals, the Director’s Salaries (Gross) figure is automatically calculated on the lower of the average of the Director’s Salaries figures as entered into the ‘Self Employed’ worksheet or the latest year, whichever is the lowest figure. Income tax is then calculated on this figure.

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Rental Income Rental Income: Input the details of rental income generated from real estate property investments in personal names provided; • That the property is currently owned, or• Is being purchased as part of the lending proposal.

If the applicant has other rental properties that are not mortgaged (unencumbered) and this income is to be used, the rental income and ownership will need to be validated.

For investment properties owned or being purchased by a company or trust, the rental income should be input in the Self-Employed worksheet under “Other” with the shading as per credit policy to apply (i.e. residential property = 80% of gross rental income).

To add additional rental property lines, click on ‘Add Line’ to the right of the worksheet. • Input the full address of the investment property to which the rental income

relates in the Address column.• Select the investment property type from the drop down options in the

Property Type column. E.g. For a residential house, select ‘House and Unit/Apmt’ For high density units, select ‘All High Density’

• Input the Gross weekly rental income in the Weekly$ column.• Input the applicant’s % share of net rental income for each property.

Note: The above information DOES NOT auto populate to the Negative Gearing Calculator.

The following fields will automatically populate from the data entered in the Rental Income fields.

TOTAL RENTAL INCOME PER APPLICANTTOTAL RENTAL INCOME PER HOUSEHOLD

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Monthly Living Expenses

Monthly Living ExpensesInput the total monthly living expenses (excluding rent and child support) disclosed by the applicant/s in the Consumer Lending Application form, or for guarantors in the Guarantor Details form. Calculations will not appear if the Living Expenses field is left blank.

Notes:1. The household living expenses obtained from the Lending Application Form

are reasonable compared to the applicant (s) bank account statements.

2. Include in living expenses all Body Corporate Levies/Fees paid by the applicant.

Summary The following fields will automatically populate provided all information, including living expenses have been input.

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All liabilities either with BOQ or other external lending institutions, and personal liabilities must be included. For example:

• Business loans;• Overdrafts; (Business or Residential)• Leasing/Hire Purchase Facilities;• All Retail Loans; (Home Loans, Line of Credits, Personal Loans, Credit Cards and Store Cards)• Child Support/Maintenance payments;• HECS/HELP re-payments;• Rent; and • Any other known or disclosed liability, such as Flexi rent or Certegy payments.

When completing this worksheet always follow the standards below:

• Where required input the remaining loan term not the original loan term;• For loan facilities, input the outstanding loan balance including any available redraw.

Tip: Redraw can be available on both Retail and Business Loan facilities.

• For overdrafts, line of credits, credit cards and other revolving credit facilities, always input the facility limit as the loan amount, not the current balance.

• Progress Draw Loans should be calculated on a Principal and Interest (P&I) basis, using the approved limit amount, not the current balance.

• For Housing Loans and Line of Credit facilities the higher of the assessment rate or actual interest rate is used.

For example: If the floor assessment rate is 3.15%, and the Lender inputs a revert rate of 3.00%, the worksheet will default to the assessment rate. Conversely, if the Home Loan revert rate is 5% then this rate must be utilised.

Information to complete this part of the serviceability worksheet is obtained from the Lending Application form and account statements. Refer to the relevant credit policy for requirements.

THE SERVICEABILITY WORKSHEET 3 - DEBT SERVICING

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External Loans – All non-BOQ loans

Product Select from drop down options the correct product type.

Financer Input the name of the external lending institution.

Account Number Input account number where known.

Liability Status Select from drop down options, ‘Remain or Reduce’. If the facility is new or will continue to remain, select ‘Remain’.If the facility is reducing, select ‘Reduce’.

Outstanding Balance/Limit

Input the Balance/Limit. Where the balance/limit is reducing, input the reduced amount.

Note: For loans with available redraw, the amount entered should include any redraw value.

Remaining P&I term

Where this cell is yellow, select from drop down list the remaining term. The term is in month’s, not years. For example: 360 month’s = 30yrs, 300 month’s = 25 years.If the cell is grey – no input is required. If the term is reducing, select the reduced P&I term.

Current Minimum Monthly Repayment Where this cell is yellow, input the monthly repayment amount.

Annual Commitment Output calculation.

BOQ Loans – All BOQ loans including Business and Personal facilities

Product Select from drop down options the correct product type.

Account Number Input the BOQ account number where known. For new lending, input ‘new’ as the account number.

Liability Status Select from drop down options, ‘New/Remain or Reduce’. If the facility is new or will continue to remain, select ‘New/Remain’.If the facility is reducing, select ‘Reduce’.

Outstanding Balance/Limit

Where the balance/limit is reducing, input the reduced amount.

Note: For loans with available redraw, the amount entered should include any redraw value.

Remaining P&I term

Select from drop down list the remaining term. If the term is reducing, select the reduced P&I term.The term is in month’s, not years. For example: 360 month’s = 30yrs, 300 month’s = 25 years.

IR%Input the actual interest rate or relevant revert interest rate.

Note: For Home Loan and Line of Credit facilities the higher of the actual interest rate or assessment rate applies.

Buffer The buffer will automatically update inline with the selected lending product.

Annual Commitment Output calculation.

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All Other Commitments/Expense

Current Monthly Repayment Input the monthly repayment amount payable.

ANNUAL COMMITMENT Output calculation.

Leasing/Hire Purchase Facilities /Asset Finance

Financer Input the name of the external lending institution.

Account Number Input account number where known.

Outstanding Balance/Limit Input the Balance/Limit.

Current Minimum Monthly Repayment Input the monthly repayment amount.

Annual Commitment Output calculation.

Bridging Loans

Currently, there is no product drop down available for Bridging Loans in the BOQ Loans or External Loans sections.

1. To calculate interest only repayments: Total Loan Amount x Total Interest rate as a percentage (Actual Bridging Facility Rate + Buffer at 2.25) / 12

For example: $500,000 x 9.39% /12. (This was based on a Bridging rate of 7.14% +2.25% = 9.39%)

2. Enter the monthly repayment value calculated in the ‘All Other Commitments/Expense’ section, and

3. Amend the yellow field of ‘Other’ to: ‘Bridging Loan Repayment’.

Interest Free and Online Purchases

Unregulated lenders such as, but not limited to: zipPay, Afterpay, and Flexirent repayments are to be entered as follows.

If the repayment is on an:

Instalment basis:Take the figure based off the current obligation re-calculated to a monthly figure or the monthly repayment figure as advised by the applicant. No term or buffer applies.

Enter the monthly repayment in the ‘All Other Commitments/Expense’ section.

Credit limit:Enter the credit limit under the “Credit cards” section.

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Note: The worksheet will automatically calculate the annual commitment based on 3.8% per month of the total credit limit. For charge cards with no limits, input the highest monthly spend figure over the last three month period.

Individual Credit Card Capacity - If a message populates ‘Shortfall - Maximum customer can service equals $0.00’, this means the applicant cannot service the limit requested with Citibank. This message can appear even where the worksheet shows a surplus figure.

The following fields will auto populate once all required data is input

1. Total Debt Service Costs: - Total amount of all liabilities, commitments/expenses.

2. Surplus after Debt Servicing: - Cash Available for Debt Service less Total Debt Service Costs.

Credit Cards/Charge Cards

Existing Cards not being Refinanced – Credit Card Limit

Input the credit card limits for all existing credit cards (both BOQ and other financiers/institutions).

New Card Limit Input the new or additional BOQ credit card limit.

Annual Commitment Output calculation.

Notes: Child Support - Where child support is payable - the dependant child does not need to be included as a dependant in the Personal & Rental Income worksheet.

HECS/HELP - Where an applicant has a tertiary education debt (HECS/HELP), compulsory repayments are required when their income reaches the Australian Tax Office (ATO) prescribed income threshold. Amounts payable are shown on either payslips, Tax Assessment Notices, or Income Tax Portals.

Refer to the ATO website for current repayment thresholds, rates, and further information.

Where the applicants income meets the ATO requirements or where an HECS/HELP liability is disclosed or identified the liability must be included.

Rent - Input the full rent amount payable as shown on the lease agreement. To utilise a lessor amount, a policy exception is required.

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This worksheet is used to input and calculate any negative gearing benefit an applicant may receive from their real estate property investments.

Negative gearing benefits can be calculated for up to four (4) applicants. If you added more applicants in the ‘Personal & Rental Income’ worksheet, those applicants will also display here.

There are two sections of this worksheet that need to be completed in order to show a benefit. The first section is for the applicant’s income which includes the calculated benefit, and the second is the details of the rental income and tax deductible loans.

Taxable Income The first part of the calculator is where the Gross taxable income and the tax payable on that income are displayed. These fields will automatically populate from the income entered in either the ‘Self Employed or Personal & Rental Income’ worksheets.

The following fields will automatically populate when data is input in both the Investment Property Details and the Existing & Proposed Tax Deductable fields.

Negative Gearing Benefit;

Taxable Income; and

Income Tax on Taxable Income.

Net Tax Benefit: This figure will auto populate based on the data entered in the calculator, and the figure will then auto populate in the Negative Gearing Benefit Figure (add back) field in the ‘Personal and Rental Income’ worksheet.

THE SERVICEABILITY WORKSHEET 4 - NEGATIVE GEARING CALCULATOR

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Investment Property Details

The second section of the worksheet is where the property and rental income details from existing and proposed investment properties and the details of the corresponding loans where the interest payments are tax deductible is input.

Existing & Proposed Rental Income

The calculator assesses the annual income based on the ownership ratio and the gross rental income generated.

• Input the address of all properties where the rental income is generated from in the Property Address column.

Note: If the application with BOQ is for the purchase of an investment property, input the property address preceded with the words ‘Proposed BOQ’.

• Select from the drop down options the correct investment property type in the Property Type column.

• Input the applicant’s share of property ownership as a percentage, in the % Share column. For example: If the applicant is a joint owner of the property, the share percentage is 50% of the rental income.

• Input the Gross Weekly rental income amount (before fees) in the Gross Weekly Rental column. This amount must equal the Weekly $ amount entered in the Rental income section on the ‘Personal & Rental Income’ worksheet.

The Annual Income field will automatically populate based on the data entered above.

Bank of Queensland Limited ABN 32 009 656 740 (BOQ).

Existing & Proposed Deductible Loan

• Input the account number of any loans that correspond to the investment properties in the above Existing & Proposed Rental Income table, in the Account No. column.

• Input the balance owing on the loan in the Loan Balance column.

Note: If the applicant is applying for loans with BOQ to purchase an investment property input the account number as ‘Proposed BOQ’, and the proposed loan amount in the relevant fields.

• Input the percentage (ratio) of ownership that the applicant has in the % Share column.

For example: if the loan is in joint names input 50% in the % Share column.

• Input the current interest rate payable on the loan in the Interest Rate column.

• The Annual Interest Expense field will automatically populate based on the data entered.

Tip: Where percentage of ownership is not evident, obtain information from the applicant and verify ownership via a property search, contract of sale, or tax return.