Latest news with #HEM
News.com.au
5 days ago
- Business
- News.com.au
Expenses that affect your borrowing power for a home loan
Want to know how much you can borrow? While income and deposit size are crucial factors in any home loan application, there are also a range of 'liabilities' that lenders take into account when assessing how much they will lend to you. COSTS THAT DRAIN YOUR BUCKET Mortgage broker and founder of Two Red Shoes Rebecca Jarrett-Dalton says it's helpful to think of it like 'a big bucket of money.' Not only do banks deduct tax as well as regular living expenses, generally using the HEM index, they also consider a whole range of other additional expenses, or liabilities, depending on your lifestyle and financial situation. These include credit card limits, any kind of repayment, including car loans and personal loans, HECS debts, private health and life insurance costs, private school fees, and in some cases, Strata fees. 'Whatever is left is broken down into a monthly figure,' she says. 'Everything that is not an average living expense has an impact.' And the impact can be quite substantial. 'Every $10,000 of credit card limit is about a $50,000 reduction in your borrowing capacity,' she says, explaining that any type of repayment could shrivel your borrowing power. 'If we think about every kind of repayment, a credit card they take 3.8 per cent, so $10,000 is $380.' 'Every $380 worth of repayments, whether they be loan repayments, whether they be HECS repayments, whatever they are, is a $50,000 additional reduction. 'So if you think of an average car loan sitting close to $1000, that's three times – that's $150,000.' Novated leases are even more costly, she says. 'The banks can't separate out what is the finance component and what are the general running costs so they have a huge impact on your borrowing capacity,' she says. 'Essentially in your average living expenses they take out an average running cost of the vehicle as well as it coming out in the actual repayment.' If Strata costs aren't included in the HEM index used by the bank, they are generally assessed using the $380 worth of repayments method, meaning 'if your Strata is $1000 a month it's about a $120,000-$130,000 reduction.' WAYS TO HELP YOUR APPLICATION You may not be able to compromise on costs like health insurance, Strata or private school fees, but you can improve your borrowing capacity by paying down existing debts. Canstar's data insights director Sally Tindall says reducing credit card limits also goes a long way since banks 'have to assume the worst – that you've maxed out your card' when they assess your expenses. 'Credit cards have the capacity to burn a giant hole in your maximum borrowing capacity, even if you don't owe a single cent on the card,' she says. Tindall says aiming for a lower rate can also help since lenders add a three per cent buffer during the assessment process. 'For example, someone applying for a mortgage, on the average wage as a single borrower on a rate of 5.50 per cent instead of 6 per cent, could see their maximum borrowing capacity rise by around $24,000,' she says. But she says it's important to leave some financial breathing room when taking on a mortgage. 'Just because your bank says it's OK to borrow up to a certain amount, this doesn't automatically mean you should,' she says. 'A home loan can be for up to 30 years – that's a long time to be saddled with debt that you have trouble managing day-to-day.' APPLICATION TIPS The best way to improve your borrowing capacity is to increase your income and pay down your debts – just remember that a mortgage is a big commitment and borrowing to your maximum limit is never recommended. Canstar's data insights director Sally Tindall shares some ways to strengthen your home loan application. 1. Increase your income – even a $5000 pay rise on the average wage could improve a single person's borrowing capacity by more than $30,000 2. Shop for a lower rate – a single person applying with an average wage on a rate of 5.50 per cent instead of 6 per cent could see their maximum borrowing capacity rise by about $24,000 3. Save more – a larger deposit could mean you'll need to borrow less and potentially avoid LMI 4. Cut up credit cards – cancel excess credit cards and reduce excessive limits remembering that a $10,000 limit will reduce your borrowing power by about $50,000
Yahoo
22-05-2025
- Business
- Yahoo
NAB's radical mortgage change to give homebuyers $30,000 power boost
NAB is changing the way it assesses your mortgage application, which could massively boost your borrowing power. Banks across Australia use what's called the Household Expenditure Measure (HEM) when assessing someone's mortgage application. It gives lenders a rough guide on the amount of money that someone in your situation would be spending every month. Mortgage broker David Pelligra said NAB's small tweak arriving on Friday will be a big win for certain buyers. "It's so common now that first-time buyers are buying townhouses, units, apartments, and there are always body corporate and strata fees, which wildly impact their serviceability," he said. RELATED Controversial mortgage practice costs homebuyer $30,000 after tiny pay increase: 'Unfair' $500 ATO cash boost that Aussies have weeks to claim: 'Hard to beat' Aussies given fresh $100 energy bill rebate in $50 million cost-of-living promise From Friday, May 23, NAB will include body corporate and strata fees for owner-occupied properties in its HEM calculations. The bank said changing those fees from additional living expenses to general living expenses creates a more accurate representation of regular household costs. It also ensures mortgage serviceability assessments reflect the true nature of ongoing property a bank is assessing how much to lend you, it will combine your measure with your additional living expenses. The type of spending that's included in HEM is things like your bills and utilities, groceries, fuel, whether you have kids, and how old they are like. They are costs you basically can't avoid. HEM can also include certain discretionary spending, but that is up to each lender. Additional living expenses are things like life insurance, private school fees, or health insurance (even though the government can penalise you if you don't have this). Under the bank's eyes, those are technically optional costs. Up until now, NAB viewed body corporate and strata fees as something that was optional, even though you couldn't avoid them if you owned an apartment. Pelligra told Yahoo Finance he had a recent client who was applying for a loan who was paying body corporate fees. It was $3,000 a year in fees, which is $250 per month. The mortgage broker explained that if those fees were considered additional living expenses, then she would be able to borrow around $380,000 from the bank. However, with those expenses listed under HEM, she was able to borrow $410,000. That's a $30,000 increase in borrowing power with this simple change. Pelligra said he's had to coach many clients about how body corporate or strata fees could affect the amount they will borrow depending on the bank they choose. HEM is based on the Australian Bureau of Statistics' (ABS) Household Expenditure Survey, which is updated every six years and provides a snapshot of the typical spending behaviour of Australians. The measure is also adjusted every quarter to keep pace with inflation. NAB updated its figure twice a year. When you submit your mortgage application, you will also have to outline your general and additional living expenses. Once a lender is able to create a HEM guide for you as an applicant, it will take whichever is highest out of the HEM number and your expenses while retrieving data Sign in to access your portfolio Error while retrieving data
Yahoo
15-05-2025
- Business
- Yahoo
Controversial mortgage practice costs homebuyer $30,000 after tiny pay increase: 'Unfair'
An Australian homebuyer has seen nearly $30,000 knocked off his borrowing power after getting a small pay rise. While an increase in your salary usually means you can afford a bigger loan, it can actually hurt you in certain circumstances. It's all due to the Household Expenditure Measure (HEM), which banks of all shapes and sizes use to estimate how much you spend. Berti Financial mortgage broker Mohammed Jomaa told Yahoo Finance that HEM can create nightmares for certain people. He had a client recently apply for a home loan, who had a salary of $127,500 per year. Homebuyers warned against common mortgage mistake after $150 issue: 'Dumbfounded' Centrelink issues urgent Age Pension eligibility change warning: 'Double check' Retirement warning as controversial $3 million superannuation tax change looms: 'Be proactive' With that income, he could borrow up to $980,362 as his HEM was estimated to be $2,852 per month. However, a small pay rise of just $2,500 to $130,000 per year cost him dearly. That pushed him into a higher expenditure bracket, which Jomaa said is different for every lender and isn't publicly available client's new HEM was $3,183, and it meant he could only borrow $951,625, which was $28,737 less than before his pay rise. Jomaa said bigger pay rises of more than $10,000 to $15,000 usually don't cause these types of issues because even if you end up in a higher HEM range, you'll still have more money to play with for a bigger loan. It's more of a concern for those getting those small pay increases in line with inflation. Housing Expenditure Measure takes into account your non-discretionary spending, which are things you can't live without. This includes things your rent, your bills and utilities, groceries, fuel, healthcare, whether you have kids, and how old they are like. It's based on the Australian Bureau of Statistics' (ABS) Household Expenditure Survey, which is updated every six years and provides a snapshot of the typical spending behaviour of Australians. The measure is also adjusted every quarter to keep pace with inflation. It can also include certain discretionary spending, but that is up to each lender. When you apply for a mortgage, you will have to give a rough estimate of your living expenses. Jomaa said the lender will take whichever is highest, its HEM or your estimate. If your estimate is lower, it will still take the HEM. Jomaa told Yahoo Finance that HEM can be unfair because it loads homebuyers into certain brackets even if they're living well below their means. He said someone could be spending next to nothing for months to show they could afford a mortgage, but banks would still use their HEM formula to show their expenses could be higher. "It's not fair to paint everyone in the same brush," the mortgage broker said. "Especially those who are very strict with with their budgeting and very conscious of what they spend their money on. "You shouldn't just assume they're going to spend this this amount, especially when we can prove it. "If we can prove over three or six months that these are their actual living expenses, why are you using this inflated figure when clearly they're spending this amount?" But the flip side can also be true. HEM was particularly criticised for causing serious mortgage stress for borrowers. Mortgage applicants could under-report their expenses, leaving lenders to use the HEM formula because it was higher. But those applicants would then get approved for loans that they couldn't afford because they weren't honest about how much they were spending every month. HEM was thrown into the spotlight during the Royal Commission into the banking sector. Commissioner Kenneth Hayne said the measure wasn't a sufficient alternative to verifying a borrower's actual living expenses. ANZ was particularly called out for automatically approving more than seven in 10 mortgage applications using HEM. Then CEO Shayne Elliott promised to reduce that number to one in three by the end of the 2018-19 financial year. Commonwealth Bank CEO Matt Comyn also said at the time that lenders would only be using HEM for around 50 per cent of applications. Wayne Byres, then-chairman of the Australian Prudential Regulation Authority, urged banks to "devote more effort to the collection of realistic living expense estimates from borrowers", rather than purely relying on while retrieving data Sign in to access your portfolio Error while retrieving data
Business Wire
02-05-2025
- Business
- Business Wire
Bidgely Surpasses 1.5 TWh of Energy Savings, Offsetting 1M Tons of CO2 Emissions
LOS ALTOS, Calif.--(BUSINESS WIRE)-- Bidgely today announced that its artificial intelligence (AI)-driven solutions have accumulated over 1.5 terawatt-hours (TWh) in energy savings, equivalent to offsetting over 1 million metric tons of CO2 emissions. Bidgely's 1.5 TWh in energy savings was achieved through the collective efforts of a growing customer base across all fuel types — gas, electric, dual fuel and even water — leveraging the company's UtilityAI™ Platform to boost energy efficiency through enhanced customer engagement strategies. This achievement, fueled by our financial strength, continued leadership, and dedication to consistently delivering customer value, is a milestone we are excited to share with the market. Share This milestone follows Bidgely's rising 'Leader' status on Guidehouse Research's latest Home Energy Management (HEM) Leaderboard, which recognized the company's expanding offerings for home energy reports (HERs), time-of-use (TOU) initiatives and managed electric vehicle (EV) charging. According to the report, ' the company's dedication to expanding its platform capabilities, reaching new clients, and delivering quality services suggests that it will remain a Leader in the HEMS market for the foreseeable future.' The company's customer engagement strategies, including personalized consumption insights, energy profiling and behavioral load shifting, also ranked Bidgely a 'Leader' on Guidehouse Research's 2023 Customer Experience and Engagement Analytics leaderboard as well as IDC MarketScape's 2023 and 2021 Customer Engagement Vendor Assessments. The impact of achieving over 1.5 TWh of energy savings is equal to offsetting CO2 emissions for one year from: Over 1 billion pounds of coal burned Nearly 2.5 million barrels of oil consumed Nearly 121 million gallons of gas consumed Industry-Leading Home Energy Management and Customer Engagement Bidgely's patented disaggregation and UtilityAI™ platform helped utilities like Avista, NV Energ y, Pacific Power, PSEG Long Island, Southern California Gas among others unlock real-time energy usage insights from raw meter data to drive smarter energy consumption through a suite of customized solutions, including: Home Energy Management Program: 360-degree view of household energy use, broken down by appliance and usage patterns. Home Energy Reports: Personalized, dollar-based reports with easy-to-understand energy-saving recommendations. Customer Experience & Engagement: Multi-channel customer connection via smart alerts, web portals, and call center staff equipped with one-click consumption analytics. Combined, these tools created a journey for homeowners to gain new visibility into their highest-impact appliances in order to better focus their energy-saving efforts, i.e. adjusting thermostat settings or upgrading to more efficient appliances. 'This achievement, fueled by our financial strength, continued leadership, and dedication to consistently delivering customer value, is a milestone we are excited to share with the market,' said Bidgely CEO Abhay Gupta. 'The future of energy isn't just about grids and power—it's about people, resilience and intelligent action. Bidgely is helping create a world where utilities don't just manage demand—they anticipate and shape it.' Beyond Energy Efficiency — Driving Greater Savings Through Smart Load Shaping By strategically evolving and expanding its product suite, Bidgely's 1.5 TWh in energy savings is also a result of empowering utilities to boost enrollment in key load shaping and load shift programs. Bidgely's granular targeting of high-grid-impact customers unlocked the full potential of TOU rates, demand response and managed EV charging for its utility customers, while its recent GenAI integration enhances the accessibility and scalability of these programs. 'Achieving 1.5 TWh is more than a number; it's a demonstration of the future of energy management,' said Gautam Aggarwal, chief revenue officer at Bidgely. 'The precision and effectiveness of data-driven customer targeting activates unprecedented levels of efficiency and grid stability that will be instrumental for thriving in shifting dynamics of the energy industry.' To learn why utilities are using Bidgely's AI-powered solutions to enhance energy efficiency and customer engagement, download the report: Guidehouse Research Leaderboard: Home Energy Management Systems Providers. About Bidgely Bidgely is an AI-powered SaaS Company accelerating a clean energy future by enabling energy companies and consumers to make data-driven energy-related decisions. Powered by our unique patented technology, Bidgely's UtilityAI™ Platform transforms multiple dimensions of customer data - such as energy consumption, demographics, and interactions - into deeply accurate and actionable consumer energy insights. We leverage these insights to empower each customer with personalized recommendations, tailored to their individual personality and lifestyle, usage attributes, behavioral patterns, purchase propensity, and beyond. From a distributed energy resources (DER) and grid edge perspective, Bidgely is advancing smart meter innovation with data-driven solutions for solar PVs, electric vehicle (EV) detection, EV behavioral load shifting and managed charging, energy theft, short-term load forecasting, grid analytics, and time of use (TOU) rate designs. Bidgely's UtilityAI™ energy analytics provides deep visibility into generation and consumption for better peak load shaping and grid planning, and delivers targeted recommendations for new value-added products and services. With roots in Silicon Valley, Bidgely has over 16 energy patents, $75M+ in funding, retains 30+ data scientists, and brings a passion for AI to utilities serving residential and commercial customers around the world. For more information, please visit or the Bidgely blog at
Time of India
22-04-2025
- Health
- Time of India
GMC may approach NMC over stay on doctor's debarment
Ahmedabad: A day after the National Medical Commission (NMC), the country's apex medical body, stayed the three-year debarment of Dr Prashant Vazirani , a city-based cardiologist, the Gujarat Medical Council (GMC) is likely to approach the NMC with details of the probe committee report. Tired of too many ads? go ad free now On Monday, GMC officials said that Dr Vazirani was debarred from the register of medical practitioners in Nov last year after his arrest for his alleged role in the deaths of two patients at Khyati Hospital in Ahmedabad. Dr Vazirani performed angioplasty procedures on seven patients, of whom two succumbed to post-procedure complications. Sources close to the development said that many in GMC believe the stay will set a wrong precedent, especially when Dr Vazirani, who is still behind bars, has been accused of grave medical misconduct. In its chargesheet filed before a judicial magistrate first class (JMFC), the crime branch had stated, "Though he was not registered on PM-JAY's HEM portal, visiting cardiologist Dr Prashant Vazirani treated patients under the govt scheme in Khyati Hospital and performed angiographies and angioplasties." It claimed that the procedures were performed as part of a conspiracy, for which he brought in 19 patients to the hospital from the free health checkup camp at Borisana village on Nov 10, 2024. He received payments for the procedures from the hospital. The chargesheet further stated, "There was no medical requirement or reason to perform procedures on the 19 patients in the absence of their relatives or without obtaining their consent. He conducted angiographies as part of the conspiracy under the instructions from the hospital's chairman and directors." The investigation report further stated that out of 19 patients, seven did not have blockages and yet the cardiologist prepared heart diagrams showing 70% to 90% blockages and uploaded them on the PM-JAY portal. Tired of too many ads? go ad free now Vazirani was accused of creating panic among the patients and their relatives by telling them that the blockages would require immediate intervention, failing which they may suffer a heart attack. "By creating panic, he got signatures from seven such patients on consent forms to place stents, and conducted angioplasty on them. By doing so, the accused doctor bypassed fundamental principles and moral values of medical practice and unnecessarily implanted stents, causing the death of two patients," the investigator mentioned in his probe report.
