A growing number of property investors who bought during the 2021–22 boom are now confronting a lender-imposed straitjacket they did not see coming. The setup is cross-collateralisation: a second property deed is tied to an existing loan, giving the bank a claim over more than one asset. When markets were rising and rates were falling, the structure looked like a convenient way to access equity without a separate application. As the cash rate moved from 0.10 per cent to 4.35 per cent between May 2022 and November 2023, and property values in key investor postcodes softened or stalled, that convenience has morphed into a refinancing hazard. In March 2025, ANZ and Macquarie Bank updated their credit manuals to tighten the way they treat cross-collateralised investment exposures, following a sector-wide push by APRA to force lenders to recognise concentration risk inside their mortgage books. For borrowers, the arithmetic has shifted: what was once a pragmatic equity-release shortcut is now a barrier to selling, refinancing, or accessing better rates. This article examines the precise policy settings that now govern cross-collateralised investment loans at ANZ and Macquarie, the math that decides whether a loan passes serviceability, and the steps any investor can take to avoid an equity trap.
How Cross-Collateralisation Rewires a Loan Structure
The Mechanics of Linked Security
When a loan is cross-collateralised, the lender takes a mortgage over two or more properties to secure a single facility—or multiple facilities linked by an “all moneys” clause. The bank’s interest extends across the entire portfolio. If the borrower defaults, the lender can force the sale of any and all properties to recover the debt. In investment lending, the most common trigger is an equity draw: an owner-occupier uses the equity in their principal place of residence to fund the deposit and costs on an investment purchase, and the bank staples the two properties together inside one security package.
Why It Traps Equity
Because all properties act as one security pool, the borrower cannot sell a single property without the lender’s consent to release the title. That consent typically requires a re-assessment of the remaining exposure using current valuation, income, and servicing calculations. If the remaining property’s loan-to-value ratio (LVR) exceeds the lender’s policy ceiling—or if the borrower’s debt-to-income (DTI) ratio has crept above the lender’s cap—the release is denied. The investor is locked into the entire package, unable to rebalance the portfolio.
ANZ’s Cross-Collateralisation Policy for Investment Loans
Maximum LVR and DTI Ceilings
ANZ’s residential lending policy, as amended in a broker circular dated 3 March 2025, caps cross-collateralised investment lending at 80 per cent LVR for the combined security package, down from 85 per cent. Portfolio lending that includes multiple investment properties triggers an aggregate DTI limit of 6.0 times, calculated on gross annual income before tax. If any single property within the package is valued below its purchase price, the bank will use the lower of the purchase price or current market valuation, and the LVR is recalculated across the whole pool, not per property.
Valuation and Equity Release Triggers
ANZ now requires a full external valuation on every property within a cross-collateralised package at the point of any partial release request. According to its March 2025 policy update, equity release is only permitted if the remaining facility’s LVR after release remains at or below 75 per cent, and the borrower’s DTI stays under 6.0 times. The bank also applies a new hard rule: if the borrower’s total aggregate exposure exceeds $2.5 million, cross-collateralisation is not permitted for new loans, and existing packages above that threshold are subject to manual credit review at repricing or rollover.
Serviceability Buffer Requirements
ANZ applies APRA’s serviceability buffer of 3.0 percentage points above the product rate for all cross-collateralised investment loans, exactly as mandated in APRA’s October 2021 Prudential Practice Guide APG 223 and reaffirmed in the regulator’s quarterly housing lending update released 10 March 2025. With ANZ’s current basic investment variable rate at 6.89 per cent p.a., the assessment rate sits at 9.89 per cent p.a. Rental income is shaded to 75 per cent of gross rent, and only 50 per cent of rental income from properties inside the cross-collateralised pool counts toward servicing if the borrower cannot demonstrate six months’ consistent tenancy.
Macquarie’s Updated Approach to Cross-Collateralisation
Standard Policy and Non-Conforming Tiers
Macquarie Bank’s credit guide for third-party brokers, version 14.2 effective 12 March 2025, restricts standard cross-collateralised investment loans to a maximum LVR of 75 per cent. Borrowers who fall between 75 per cent and 80 per cent LVR can be considered under Macquarie’s non-conforming “Specialist” tier, which adds a risk loading of 0.40 percentage points to the interest rate and applies a DTI cap of 6.5 times. For portfolio investors—defined as those with four or more investment properties financed by Macquarie—cross-collateralisation is prohibited outright, and each security must stand alone.
Intersection with Bridging and Construction
Macquarie is one of the few lenders that still permits a bridging component within a cross-collateralised structure, but under strict conditions. Both the exit property and the incoming property must be part of the security package, and the peak debt is capped at 70 per cent of the combined value. The end-debt must demonstrate full serviceability at an assessment rate of 9.50 per cent p.a. (given Macquarie’s current standard variable investment rate of 6.59 per cent p.a. plus a 2.91 percentage point buffer that Macquarie applies internally, slightly below APRA’s floor but acceptable under its advanced accreditation). Construction loans inside a cross-collateralised structure are subject to a maximum LVR of 65 per cent land plus build contract price, and drawdowns are linked to fixed-price contracts only.
Recent Policy Tightening
A Macquarie Bank product note issued to aggregators on 5 March 2025 removed the ability to use rental income from properties in a cross-collateralised package when those properties are also under a separate interest-only facility with another lender. This so-called double-counting rule has caught investors who previously used a principal-and-interest loan with ANZ and an interest-only facility with Macquarie on the same pool, now forcing a full unwind before Macquarie will approve any variation.
Where the Risks Compound for Investors
Equity Traps and Portfolio Rigidity
Cross-collateralisation turns a diversified portfolio into a single monolithic asset from the lender’s perspective. A valuation decline of 10 per cent on one property drags the entire pool’s LVR above thresholds that block any release. For ANZ borrowers, that means a property worth $800,000 inside a $2 million combined pool can suddenly push the aggregate LVR from 78 per cent to 84 per cent, triggering a demand for a principal reduction of at least $80,000 before any title is released. Macquarie’s 75 per cent LVR cap makes the trap tighter: the same numerical move forces a capital injection or a forced sale of the entire portfolio.
Refinancing Hurdles and Break Costs
When an investor tries to refinance out of a cross-collateralised package, the new lender must conduct a valuation on every property that will be released and underwrite the new single-security loans at current policy LVR and DTI limits. As of March 2025, most major banks—including ANZ, NAB, and Westpac—will not accept a “portfolio refinance” where the borrower intends to keep the same cross-collateralised structure unless the total exposure is below $1.5 million. The break costs also become material: ANZ charges a $300 per title discharge fee, and Macquarie levies a $750 discharge administration fee per property, plus any fixed-rate break costs that are calculated on market value differentials. On a $1.5 million fixed-rate package with two years remaining and a 1.50 percentage point rate differential, the break cost can exceed $40,000.
The Regulatory Backdrop
APRA’s Enduring Buffer
APRA’s serviceability buffer of 3.0 percentage points has been in place since October 2021 and remains unchanged, as confirmed by the regulator’s March 2025 quarterly statement. For cross-collateralised loans, APRA expects lenders to conduct a holistic stress test that includes a 30 per cent haircut on rental income from investment properties and a floor rate of at least 5.50 per cent, even if the product rate is lower. ANZ’s explicit adoption of the 3.0 percentage point buffer and Macquarie’s 2.91 percentage point buffer (under its internal model accreditation) both pass the prudential test, but the practical effect is that many borrowers who qualified at the time of purchase now fail when a single variable changes—rate, rent, or valuation.
DTI Caps and Macroprudential Shadow
Although APRA has not imposed a formal DTI cap, it has instructed banks to monitor high-DTI lending closely. ANZ and Macquarie have both adopted 6.0x and 6.5x DTI hard caps for residential investment loans, as disclosed in their March 2025 investor presentations. A borrower with a gross income of $150,000 and total debts—including the cross-collateralised facility—of $975,000 already sits at 6.5x. Any further equity release, rate rise, or income fluctuation pushes the ratio past the cap, freezing refinance options.
Practical Steps to Reduce Exposure
- Audit every facility for all-moneys clauses: request a copy of your mortgage documents from the lender and check if it references “all moneys” or cross-collateralisation. A single clause can chain multiple properties, and you may not know it exists until you try to sell.
- Unwind cross-collateralisation before valuations shift: approach ANZ or Macquarie while LVRs remain below the 75–80 per cent band and request a subdivision of securities. Expect to pay a new application fee and a valuation fee per property, but the cost is a fraction of a future forced sale.
- Maintain separate loan splits for each property without linking deeds: many lenders now allow a single primary security with a separate loan secured only by that property. If you hold multiple properties with one lender, insist on individual security agreements, even if it means a marginally higher rate.
- Test DTI with actual income, not expected rental: a 6.0x or 6.5x cap uses gross income that typically excludes 100 per cent of projected rental income. Run the calculation at the highest possible interest rate—9.89 per cent p.a. for ANZ, 9.50 per cent p.a. for Macquarie—and if the ratio exceeds the cap, bring forward a restructuring conversation.
- Engage a broker who tracks policy-line changes weekly: ANZ’s March 2025 update and Macquarie’s March 2025 credit guide changes slipped past many investors. A broker with direct access to lender credit teams can test a partial release scenario before you tip the lender off, preserving your negotiating position.