A non-bank lender has launched a home loan product designed to pave self-employed borrowers financially struggling due to COVID-19 a path to new home ownership.
According to Better Choice executive director Allan Savins, “This is the type of market-leading loan product self-employed borrowers have been waiting for.”
Savins pointed to a recent report by Master Builders Australia as to why, highlighting that building activity is forecasted to recover during 2021–22 with the construction of new homes expected to increase each year thereafter, all the way to FY25.
Through creating an avenue of funding for self-employed borrowers with its new product, Better Choice hopes to service this increasing demand for new homes.
The Gold Alt Doc Construction Home Loan from Better Choice offers self-employed borrowers a starting interest rate of 4.79% per annum, in addition to no risk fee or Lenders Mortgage Insurance (LMI); once construction has been completed, the rate reduces to 3.79%.
To qualify for the loan, eligible borrowers are required to have a minimum of 12 months ABN and registration.
While Savins acknowledged many self-employed borrowers have been hesitant to borrow given current widespread economic uncertainty, he believes this is “likely to change going forward”.
“We expect when the federal government eventually removes JobKeeper, possibly early next year, self-employed borrowers will be looking to consolidate debt incurred during COVID and may look for cash out in order to keep their businesses alive,” he explained.
“While banks are giving SME’s some support now, that has been largely driven by government funding. Specialist lenders and non-banks like Better Choice will be perfectly positioned to support self-employed borrowers as we move into recovery mode post COVID.
“We look forward to making further new product announcements as we continue to deepen our relationship with BNK and produce more products.”