Homeloans bucks the trend
5% deposit mortgages now on offer for the first time in 18 months
Mortgage provider Homeloans Ltd is bucking the trend. Whilst many lenders continue to tighten their lending criteria, Homeloans has just reintroduced a mortgage product that only requires a 5% deposit – for the first time in over 18 months.
“This is great news for first home buyers or other borrowers who are unable to meet the now widely expected 10-15 per cent deposit required by most lenders,” Homeloans’ general manager of funding and operationsScott McWilliam says. “And with the ability to capitalise the Lender’s Mortgage Insurance (LMI) premium to 97% Loan to Valuation Ratio (LVR), it makes this a market-leading product.”
Lending above 90 per cent is estimated to have accounted for a significant segment of total lending prior to the global financial crisis, so renewed access to this market should be considered a boost for Homeloans.
“For some bank lenders, 95 per cent lending is only available to existing customers of the bank,” McWilliam says. “However, in effect this has limited accessibility of lending at this level through the broker channel as many applicants may have preferred to deal directly with the bank. Another reason why this is a substantial initiative is that lending up to 95 per cent is now available to approved applicants irrespective of where they currently do their day-to-day banking.
“In addition, other lenders only provide access to 95 per cent lending through a limited number of brokers on their panel who meet certain criteria. And this can prevent customers accessing their loan through their selected broker.”
New product names
Homeloans’ new credit policy coincides with the launch of new product names on several products. The Balanced Special, Hassle Free Loan and MoniPower Line of Credit products will now all be known as the Homeloans MoniPower range, which will include term loans and lines of credit as both full doc and lo doc. The Homeloans Premium range becomes Homeloans Ultra, and the Smart Saver will now be known as the Homeloans ProSmart.
The new 95 per cent LVR credit policy applies to the MoniPowerfull doc loans of up to $750,000 in certain areas, in addition to owner-occupied homes, including new properties and construction loans. The MoniPower provides a competitive variable interest rate set below all the major bank standard variable rates, as well as a range of competitive fixed rates starting as low as 6.91%. It provides a 100 per cent offset home loan which also offsets interest on fixed rates, and comes with no monthly or annual fees.
Homeloans has also announcedthat approved applicants can now access a Visa card with a secured limit of $20,000 or $10,000 unsecured. This allows home buyers access to additional funds which can be crucial to help them meet additional costs associated with a home purchase.
“This product is already a standout in market with its transactional banking functionalities, such as offset account, internet banking, Bpay, Anypay, salary credits, and credit cards,” McWilliam says.“This move clearly reinforces to borrowers and brokers alike that Homeloans is a very competitive and real alternative lending partner.”