WA-based P&N Bank has announced that it has decreased its servicing assessment rate, or qualifying rate, for existing and external home loans.
Effective from 2 June, the bank – a division of Police & Nurses Ltd, which operates under the mutual model – will be reducing the servicing rate for both existing P&N Bank home loans and external home loans from 6.75 per cent to a flat rate of 6 per cent.
In an update to brokers, the bank said the changes “will strengthen [its] competitive position in the market and result in greater borrowing capacity for our members”.
However, the bank said there would be no changes to the servicing rate of new home loans, which would still be calculated at the actual rate plus 2.50 per cent.
All applications submitted prior to 25 May can rely on previous submission sheets.
The new servicing rates will apply to any applications received on or after this date, in which case, the new submission sheet would need to be used.
Applications that have been reworked after 25 May with an increase in loan amount and/or change in term should use the new submission sheet.
In-progress applications where servicing was not evident will need to be resubmitted using the new submission sheet showing the net disposable income passing.
Suncorp recently announced changes to its serviceability benchmarks, reducing its retail floor rate from 5.5 per cent to 5.3 per cent from new and existing home loan applications.
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Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.