Pepper Money breaks down more lending barriers

Pepper Money has expanded its Prime and Near Prime Clear home loan range, raising loan sizes, LVR limits and the range of acceptable property types. The changes touch how much customers can borrow, at what LVR and against what security, including updates to alt doc lending. Higher limits now apply across all location categories, from major cities to regional centres. The update rolls out across white label partnerships and arrives as major bank exits from SPV lending and government adjustments to capital gains tax and negative gearing have reshaped the market around brokers.

What are Pepper Money's new lending limits for Prime and Near Prime Clear home loans?

Barry Saoud, chief executive, mortgages and commercial lending at Pepper Money, says the lender has 'built its reputation by helping customers who don't fit the traditional lending mould, and our latest Prime and Near Prime Clear enhancements reinforce that'. Brokers can now place loans up to $5 million at 80% LVR. Up to $3 million is available at 95% LVR across category 1 to 4 locations. Those figures double and triple previous thresholds. The Lender Protection Fee can also be capitalised up to 98% LVR for full doc purchases. Unit sizes from 30m² now qualify as acceptable security across both product tiers.

What does Pepper Money's alt doc change mean for self-employed borrowers?

Pepper Money has increased alt doc LVRs to 95%, which it describes as a market first for non-bank lending. 'We've also increased alt doc LVRs to 95%, expanded lending across high-density securities and now allow the Lender Protection Fee to be capitalised up to 98% LVR for full doc purchases across our Prime and Near Prime Clear home loan options,' Saoud says. The change allows brokers to present higher-LVR options to customers who cannot supply full financial documentation. Self-employed borrowers who previously faced a hard ceiling on non-bank alt doc products now have access to the same upper LVR tier as full doc applicants.

How do Pepper Money's policy changes help regional property buyers?

The update brings Categories 3 and 4 locations in line with Categories 1 and 2, extending higher loan limits to towns and regional centres previously treated as higher-risk by default. MFAA data shows the national median dwelling value sits at $941,864. Combined regional values stand at $771,365, while Sydney's median reaches $1,282,020. 'Regional property values have grown strongly over recent years, with many lifestyle and regional centres now recording median values far above historical expectations,' Saoud says. 'What was once a difficult client scenario for brokers to place is now well within reach,' he adds. The regional alignment removes a structural gap that had persisted across the product range.

Why did Pepper Money update its policy now, and what market pressures drove the decision?

'The lending market is rapidly shifting,' Saoud says. 'Early this year, major banks had pulled out of SPV lending, and the recent government changes to CGT and negative gearing have meant broker confidence and businesses have taken a hit.' Pepper Money's update is a direct response to that pressure. Brokers are also spreading their business more widely. 'As brokers broaden the number of non-bank lenders they work with from 3 to 3.3, the opportunity for lenders is to help brokers solve more customer problems,' Saoud explains. 'That's where flexible policy, consistent credit decisioning and a willingness to look at individual circumstances become increasingly important,' he adds.

What is the 'Let's Go Lender' campaign and what does it signal?

Pepper Money has launched its policy changes under 'Let's Go Lender', a new broker campaign. Saoud is clear the two are meant to be read together. 'The campaign brings together the can-do attitude of our people with our continued focus on improving our products, policies and experience,' he says. 'These changes are the proof behind that. Larger loans, higher LVRs and broader reach give brokers more options and more momentum to help customers take their next step.' The expanded capability applies across Pepper Money's white label partnerships. Brokers looking for related analysis can find further sponsored reports and market insights across Australian Broker.

How is Pepper Money supporting brokers with education on complex scenarios?

Pepper Money has built out its education programme alongside its policy update. 'A lot of the conversations we're having today are around areas where brokers want to build confidence, whether that's self-employed lending, tax debt or more complex ownership structures like SPVs and trust lending,' Saoud says. The scale of that programme is considerable. 'Over the past year, we've delivered 29 education sessions, attracting more than 27,800 registrations across our network of over 24,787 accredited brokers,' he says. Team-level confidence is the stated goal. 'If our education gives a broker or one of their team members the confidence to have that conversation, then we've done our job.'

What does Pepper Money expect from non-bank lending over the next five years?

Saoud expects the pace of policy change across the non-bank sector to continue. His longer view is about how lending decisions get made. 'Longer term, lending will become increasingly personalised,' he says. 'Technology will continue to streamline processes, but brokers will remain critical because customer circumstances are always evolving.' This update is a starting point. 'We've always believed there are good customers outside traditional lending boundaries, and that opportunity will only continue to grow over the next five years,' Saoud says. The breadth of the current changes, across loan sizes, LVR tiers, property types and location categories, reflects that conviction in practice.

Featured expert

Barry Saoud: chief executive, mortgages and commercial lending, Pepper Money; leads mortgage and commercial lending strategy.