Liberty lending policy allows residential debt consolidation across several debt types, with the loan’s risk grade, income evidence and security determining the available route. For brokers, the same file also needs a separate calculation of upfront, continuing trail and any recovery on the loan being replaced.
A workable consolidation proposal accounts for every liability after settlement. A smaller monthly repayment alone does not explain whether the borrower benefits from moving short-term debt into a mortgage.
Upfront and Continuing Trail
Liberty residential upfront follows settlement, while continuing trail depends on the loan’s balance and conduct. The YBR Aggregation commission schedule provides a published 2024 example, with rates dependent on risk grade and loan-to-value ratio (LVR).
That schedule calculates upfront on the fifth day after settlement, using principal owing less offset. It suspends trail after 30 days of arrears or another breach. Payments recommence from the next month’s beginning when its month-end cure conditions are met.
It also states that trail stops 35 days after a demand letter if the default remains unrectified within 31 days. That cessation is permanent under the stated clause.
Keep the settled balance, offset and conduct history beside the commission statement. Apply the agreement covering that loan when calculating your entitlement.
Recovery and Restructuring Events
Early repayment can recover an upfront already paid. An internal refinance also raises a separate question: what remuneration applies to the replacement transaction?
YBR’s 2024 Liberty residential table lists these recovery tiers.
| Repayment period | Upfront recovered |
|---|---|
| 0 to 6 months | 100% |
| 7 to 12 months | 75% |
| 13 to 18 months | 50% |
| 19 to 24 months | 25% |
Keep an internal refinance’s old-loan recovery and new-loan entitlement as separate entries. A changed account number or new split alone does not establish commission on the entire balance.
Use the following reconciliation for each proposed structure.
| Event | Old loan to record | New transaction to record |
|---|---|---|
| External refinance to Liberty | Payout amount, previous lender and applicable recovery | Liberty settlement amount, offset and commission basis |
| Internal refinance | Existing Liberty balance and treatment of the payout | Replacement balance, retained debt and additional funds |
| Additional borrowing | Balance before the increase | Amount actually advanced and its purpose |
| New splits | Amount transferred from each existing account | Each split’s purpose, balance and newly advanced funds |
For example, suppose an existing $400,000 Liberty loan becomes a $450,000 facility. In this hypothetical case, $50,000 is additional borrowing. Record the $400,000 replacement separately instead of treating the full $450,000 as additional lending. The applicable remuneration terms determine payment on each component.
Record exposure before a refinance settles. Track My Trail’s Clawback Risk lists loans within their clawback period, showing days remaining and upfront at stake under lender or aggregator rules. For broader retention actions, use the guide to mortgage broker commission clawbacks.
Consolidated Debts and Loan Purpose
Liberty’s residential debt-consolidation loan can consider credit cards, personal loans, car loans and tax debt. Its public page lists a maximum 90% LVR, with loan size also subject to postcode restrictions. The selected income and credit route still determines which proposal fits.
Liberty’s 2024 residential announcement specifically extends ATO and state tax-debt consolidation to Custom AA low-doc borrowers below 70% LVR. That condition belongs to the named route. It is not a general limit for every Liberty consolidation loan.
Prepare a liability schedule showing creditor, borrower, limit and payout amount. Mark each debt as repaid at settlement, partly reduced or continuing. Support settlement payouts with statements and payout instructions. Carry retained liabilities into the post-settlement affordability assessment.
Separate money paid to creditors from cash released to the borrower. State the cash-out purpose and attach evidence supporting the requested amount. Where a business liability is involved, identify the debtor and the original purpose of that debt. Residential property as security does not by itself decide whether a request belongs in residential or business lending.
A hypothetical file might replace a $420,000 mortgage and repay $30,000 of personal debts, while leaving a $12,000 card limit open. The post-settlement assessment must account for that continuing card facility. Explain the proposed mortgage term and total borrowing costs alongside the monthly repayment reduction.
Credit Conduct and Income Support
Liberty considers residential applications involving defaults, mortgage arrears and past bankruptcy. Its bad-credit home-loan page describes assessment of the borrower’s circumstances. A credit event’s presence alone does not establish the product, rate or approval outcome.
Give the assessor a chronology of each event. Record the cause, amount and settlement status, then explain what changed. Match the account history to the credit report and attach evidence of repayment or resolution. Distinguish a one-off disruption from continuing missed payments.
Choose the income route from the evidence the borrower can supply. For a full-doc submission, organise the employment or business income records supporting the assessed earnings. Reconcile inconsistent amounts before presenting an income figure.
Liberty’s low-doc residential guidance identifies bank statements, business activity statements and a completed accountant’s declaration as alternative income evidence. These are evidence options for assessment. They do not mean every document substitutes for every other document on every route.
Explain any difference between declared earnings and money received. For a self-employed borrower, show how business income supports personal repayments after operating costs and existing commitments. Keep income verification separate from the explanation of past credit problems.
Residency and Security Fit
Applicant status and property eligibility need their own assessment, even when the borrower’s income or credit history fits a residential route. The Liberty Free Home Loan target market determination includes individuals with at least one residing in Australia and corporate trustees for family trusts.
That description does not establish eligibility for every visa or ownership structure. Record citizenship or visa status for each applicant, where they live and who owns the proposed security. Match the borrowing entity to the property ownership and guarantee structure.
For the property, record postcode, type and intended use, with land size and valuation details. Liberty’s low-doc product page states LVR and postcode restrictions. Its 2024 announcement also identifies vacant land as sole security for eligible custom deals below 70% LVR in eligible postcodes.
Treat that vacant-land rule as a specific security condition. A borrower qualifying for alternative income evidence does not automatically qualify for every property type. Use the lender policy directory when comparing another lender’s treatment of the same security.
Evidence for an Exception
A Liberty exception request needs a precise departure from policy and evidence explaining why the proposed repayments remain affordable. Liberty’s responsible-lending statement requires enquiries into the borrower’s objectives and verification of their financial situation.
Prepare the request so the assessor can follow the numbers and the explanation together.
- Name the selected residential route and the exact condition needing an exception. State the loan amount, purpose and LVR.
- Attach conduct records and explain the cause of each adverse event. Include evidence of the circumstances that now support repayments.
- Reconcile income evidence to the earnings used in the assessment. Show continuing expenses and liabilities after settlement.
- Set out all settlement disbursements, including creditor payouts and cash released. Explain the borrower benefit and the effect of extending any debt’s term.
- Attach the valuation and describe the security issue requiring consideration. Explain the proposed repayment arrangement with supporting figures.
For access and submission steps, use the Liberty broker portal guide. Submit the exception as a specific credit request supported by that file’s evidence, with the debts that remain after settlement clearly identified.
