The CEOs of two of Australia’s big banks say they are concerned about signs of growing mortgage stress but they are taking different approaches to dealing with it.

Commonwealth Bank CEO Matt Comyn and ANZ CEO Shayne Elliott appeared before the House of Representatives Standing Committee on Economics yesterday, where they were asked for their views on the hot housing market and rising debt levels.

According to APRA’s June quarter ADI statistics, the proportion of new residential mortgages funded during the quarter that had a debt-to-income ratio of six times or more rose 5.8 percentage points to 21.9 per cent, compared with the June quarter last year.

The proportion of high-DTI loans recorded in the quarter is the highest since APRA started collecting the data in 2019 (when the high-DTI level was 15 per cent).

Comyn said: “We are increasingly concerned about mortgage stress. We are not concerned about where we are now but, given the rate of growth in credit versus the outlook for growth in income, it would be better to act sooner rather than later.”

In June, CBA increased its serviceability buffer for home loan applicants from 5.1 per cent to 5.25 per cent.

“Standards are not deteriorating but we want to make sure borrowers are resilient,” Comyn said.

Elliott said: “We have one million home loan customers and the book is in good shape. But there are some emerging signs of stress. It is always time for caution when you see the price rises we have seen.”

Elliott said ANZ was taking more time to assess loan applications, asking more questions of the borrower.

“We have been cautious with this for a while and we have lost some market share because of it,” he said.

A recent broker survey conducted by Macquarie Research confirmed this, showing that ANZ takes an average of 23 days to approve a loan – one of the slowest turnaround times in the industry.