Resi announced some exciting enhancements to its Essentials Options product at the 2022 Vow/YBR National Conference taking place in Uluru today!
We are pleased to introduce Monthly LMI which is available on our Essentials Prime Full Doc product for up to a maximum LVR of 95% and a new 40-year loan term through our Essentials Near Prime product.
NEW – MONTHLY LMI
We have made changes to our Essential Options Home Loan product, increasing the maximum LVR to 95% (inc. LMI)
With the increase in LVR, we are also introducing Monthly LMI Premium payments.
Traditional Lender’s Mortgage Insurance needs to be paid upfront (at loan settlement) and therefore provides a financial impost on borrowers who are already deposit-constrained.
What is Monthly LMI?
A monthly LMI is an alternative way of paying for Lender’s Mortgage Insurance. Rather than an upfront payment which can equate to many thousands of dollars, a monthly amount is charged following the settlement of the loan. With monthly LMI, the premium stops if you sell the property, refinance the loan, or pay the loan down to a pre-specified Loan to Value Ratio (in our case that is 75%).
Advantages of Monthly LMI
- Homeownership becomes a reality sooner without having to pay for a once-off LMI premium
- The Monthly LMI premium does not affect the LVR being applied for
- Payments cease once the property’s Loan to Value ratio reaches 75%
- Monthly LMI premiums will cease if the loan is refinanced or paid out
- Available for Owner Occupied and Investment purposes
How does it compare to traditional LMI costs?
Traditional LMI provides the lender with coverage for the entire life of the loan (normally 30 years). It is not transferable between lenders and outside of certain circumstances, there are no refunds available for traditional Lenders Mortgage Insurance products. Traditional LMI becomes a sunk cost, even if the intention is to only hold a particular property for a period of 3 – 5 years.
Who does it benefit?
- Borrowers who would normally access 95% plus capitalised LMI, with a competitive interest rate and fee structure home loan.
- Borrowers that may be looking to sell and upgrade their property within the space of 5 years.
- Those that are looking to enter the market sooner and want to maximise their equity contribution.
For more information, please see attached brochure here.
NEW – 40-YEAR LOAN TERM*
A 40-year loan term is now available through our Essentials Near Prime product.
A 40-year home loan offers benefits to homebuyers who require an alternate option to the conventional 30-year mortgage.
- Homeownership for First Home Buyers becomes a reality
- Lower repayments on the same loan amount.
- A new option for home Investors
Policy around the 40-year term is designed to suit applicants in the early stages of their career or are First home buyers looking to enter the property market and supported by our flexible and commercial approach to exit strategies.
*Conditions apply. Applications are subject to credit assessment, eligibility criteria and lending limits. Terms, conditions, fees and charges apply. Offers may be continued, withdrawn, or changed at any time without notice.
For more information, please visit the Resi Broker Centre, or if you have any questions, please contact your Resi BDM or email [email protected]
Head of Resi Distribution