A non-bank mortgage provider has started offering an 85% loan to value residential mortgage product as it faces more first home buyers joining the market.
Homeloans’ new product has no lender’s mortgage insurance (LMI) requirement or risk fee and is available from a 4.69% interest rate.
The non-bank is set to become known as Resimac in a few weeks when it will begin migrating customers.
Its FlexiChoice Prime 85 No LMI product has no annual fee and the maximum loan amount is $1.1m.
Daniel Carde, general manager, third party distribution, said the product was designed for people who have access to a 15-20% home deposit or existing equity but did not want to pay the additional costs of LMI or be subject to the criteria of LMI credit policies.
He said, “A key feature of the loan is that there is no risk fee or LMI payable, which we expect will be attractive to a range of segments including first home buyers trying to get into the market as it becomes more affordable.
“It is also a flexible product. It allows unlimited cash out with no rate loading, except for investment security and interest only repayment. The interest rate is based on the security type rather than the loan purpose. An owner-occupier will receive owner-occupier rates even if the funds are used for investment.
“This is another example of how non-banks like Homeloans are providing Australians with a refreshing alternative to banks for their home finance.”
From 3 December Homeloans will commence marketing itself and migrating customers to the newly designed Resimac brand.
The Homeloans Ltd parent company will also be renamed as Resimac Group Limited, subject to shareholder approval at an AGM next Monday.
There will be no impact on customer loans and all contact details remain the same.