Powered by MOMENTUM MEDIA
subscribe to our newsletter

Non-bank slashes floor rate

A non-bank lender has eased its serviceability assessment policy, in tandem with its ADI peers.  

Non-bank lender Resimac has responded to the Australian Prudential Regulation Authority’s (APRA) changes to its home lending guidance, despite not officially being bound by its standards, which apply to authorised deposit-taking institutions (ADIs).

Resimac has lowered its interest rate floor from 7.25 per cent to 5.75 per cent and increased its buffer from 2 per cent to 2.5 per cent.

The changes are effective for new applications submitted for Resimac Prime products from Thursday, 1 August.

The non-bank has noted that the changes will not apply to Resimac Specialist loans, which will continue to be assessed at the higher of either a floor rate of 7.25 per cent or a buffer rate of 2 per cent.

Advertisement
Advertisement

Resimac is among the first non-bank lenders to announce changes to its assessment rates following APRA’s announcement, with several ADIs, including ANZWestpac, the Commonwealth BankNABMacquarie, Suncorp, MyState BankBendigo and Adelaide Bank, the Bank of SydneyAuswide BankTeachers Mutual Bank, Advantedge, Bankwest and Heritage Bank, reducing their floor rates to as low as 5.3 per cent.

All the aforementioned lenders have also increased their buffer rates to 2.5 per cent, as per APRA’s guidance.

In addition to revising to its assessment rates, Resimac has announced that it will be reducing its reliance on some income types.

Also effective from 1 August, Resimac will accept 80 per cent (down from 100 per cent) of the following income types under its Resimac Prime products:

  • Overtime, irrespective of employment/occupation type
  • Shift allowances and penalties
  • Bonus and commission income
  • Casual employment and second jobs
  • Investment income (rent, dividends and interest)
  • Maintenance and child support

However, Resimac will continue to accept 100 per cent of family tax benefit A & B (if payable for the next five years) and any ongoing permanent pensions (as a secondary income source).

PROMOTED CONTENT


The non-bank will also continue accepting 100 per cent of the aforementioned income types for Resimac Specialist applications. 

[Related: Lenders continue easing serviceability policies]

Non-bank slashes floor rate
mortgagebusiness

Are you a new-to-industry broker in the process of growing your business? Then there’s some great news: The Adviser’s New Broker Academy is back in 2021 and will provide you with essential insights into cutting-edge tools, strategies and processes to fast-track to success. Don’t miss your chance to attend. To secure your FREE place, visit newbroker.com.au now!

Charbel Kadib

Charbel Kadib is the news editor on the mortgages titles at Momentum Media.

Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.

You can email Charbel on: This email address is being protected from spambots. You need JavaScript enabled to view it.

Latest News

The chief of Australia’s largest bank has said lenders should act pre-emptively and shift their floor rates for mortgage serviceability am...

Total household wealth reached a high of $13.4 trillion in the June quarter, primarily due to rising property prices, according to the Aust...

The property exchange settlement platform has been granted approval to establish an Electronic Lodgement Network in the ACT.  ...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

How long do you think it should take to discharge a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.