DefinitionsDefinitions

Definitions

A separate form for housing finance in all eight states should be completed. Where the entity has no activity in any state, check the “nil form” box. This form requests details of new commitments to provide secured housing finance to individuals for the purchase or construction of dwellings for owner-occupation, and for alterations and additions to existing owner-occupied dwellings. Only the Australian activities of the business should be included on the form. If exact figures are not available please provide careful estimates. Please note that the items listed under ‘Include’ and ‘Exclude’ are examples and should not be taken as a complete list of items to be included or excluded.

What is a “commitment”?

A commitment is a firm offer to provide finance which has been accepted by the client. A commitment exists once the home loan application has been approved, and a loan contract or letter of offer has been issued to the borrower. A commitment to lend will therefore exist only after the property has been found and valued and mortgage insurance arranged (where relevant).

Report only those commitments where the legal lender on the loan contract is the company listed on the form. Commitments by subsidiary or related entities (e.g. special purpose trusts) should be reported separately.

Only secured commitments are to be reported - whether secured by mortgage, secured personal loan, contract of sale or other security.

With transactions involving a change of residence, you should treat the discharge of the existing housing loan and the commitment to a new loan as separate events, and report the total value of the new loan as a new commitment.

Include:

• finance to your employees for dwellings for owner-occupation;

• new lending commitments which have also been cancelled during the current month;

• commitments to provide bridging finance for housing;

• supplementary commitments (value only) where the original approval was not large enough to complete the purchase (where possible these supplementary commitments should be reported according to the purpose classification of the original approval);

• commitments to refinance existing loans where the original lender was not this institution. These commitments should be reported in Question 9; and

• for secured revolving credit loans report the component (drawdown) of the original credit which is for owner-occupied housing.

Exclude:

• commitments made to individuals for dwellings which are not for occupation by the owner and are not secured should be reported on RRF 394.0 Personal Finance (RRF 394.0);

• commitments made to owner-occupiers for repairs and maintenance, swimming pools and other home improvements not involving building should be reported on RRF 394.0; and