Bluestone cuts clawbacks on near prime and specialist home loans

Clawback period cut from 18 months to six months

Bluestone cuts clawbacks on near prime and specialist home loans

Specialist Lending

By Ryan Johnson

Mortgage lender Bluestone Home Loans has announced a significant change to its near prime and specialist home loan products, reducing the clawback period from 18 months to six months.

This adjustment will take effect for all near prime and specialist loans settled from April 1, providing brokers with more stable income when submitting these types of loan deals.

Bluestone's chief commercial officer, Tony MacRae (pictured above), said that the move aimed to support brokers in serving customers with non-traditional lending needs.

“We understand that some customers will graduate to other mainstream forms of lending and don't think that a broker's income should be at risk when this happens,” Macrae said.

Why reducing clawbacks is good business

Clawbacks have been a major point of frustration for brokers across the industry, leading some lenders to adjust these anti-churn policies to appeal more to third-party brokers.

As dissatisfaction with clawbacks grows, industry groups like the MFAA and FBAA have publicly voiced their disapproval, which has influenced a shift in the industry, especially among non-bank lenders.

These lenders are now taking steps to reduce clawback periods, indicating a broader movement to make their products more attractive to brokers.

For MacRae, it was an easy choice.

“There has been much debate in the industry around the fairness of clawbacks and we believe in this product set it makes sense to reduce the at-risk period and we encourage brokers to explore non-standard lending as a means to grow their businesses,” MacRae said.

“In speaking with many brokers over the past six months, a common theme has been that they often let customers walk out the door as they don't think they can help them.”

Bluestone: The non-standard customer specialist

Bluestone offers a variety of products intended for customers who may not typically meet the requirements of traditional banks.

This includes options for self-employed individuals with alternative income verification methods, as well as products for those looking to consolidate debt or address tax liabilities. Additionally, these products cater to customers with challenges in their credit history.

 “The reduction in clawback period provides greater certainty for brokers and therefore there has never been a better time to speak to a Bluestone BDM,” MacRae said.

Winning combo: Clawbacks and lower servicing buffer

Benefiting brokers immediately, this change is one of many recent optimisations implemented by the company, including expanding its BDM team over the last six months to increase broker support and implementing over 20 policy optimisations in September last year.

Recently, for example, Bluestone had reaffirmed its commitment to accessible lending with the continued offering of a low serviceability buffer.

This buffer has been reduced from 2% to 1.5% for loans with up to 70% LVR on near prime and prime products, a move that significantly benefits brokers and their clients.

Brokers often face difficulties in providing a wide range of loan options to their self-employed clients because of strict serviceability requirements.

To address this, MacRae stated that Bluestone views these clients not as risks, but as individuals with unique needs that require tailored services. 

“Big banks have long considered these customer’s too difficult, and both brokers and their clients have suffered as a result” said MacRae.

“Our stated goal is to be the go-to lender for brokers with non-standard clients, and this change in our serviceability buffer is just the latest in our policy changes that work towards that end.

“Brokers work with non-standard customers. We want to be the ‘go-to’ non-standard lender who recognises that.”

What do you think about Bluestone’s latest announcement? Comment below.

Related Stories

Keep up with the latest news and events

Join our mailing list, it’s free!