After another year of tightening credit policies and campaigning for the future of mortgage brokers, non-banks have really stepped up their game
It's also about making sure clients have less to do
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The rate cuts are an opportunity for lenders like Pepper to better help brokers find the best home loan deals for their customers, according to the non-bank’s director of sales and distribution.
Pepper has recently announced its lower rates originally offered as a temporary promotion across several home loan products will be adopted as the standard variable rate and also released details of a new interest rate promotion for brokers.
While some banks have chosen not to pass on the RBA’s recent rate cut in full, Milburn said Pepper wants its customers “to get the best, fairest deal available”.
“Customers scour the market for the best available rate for their individual situation, and that’s where Pepper can help; our credit assessors assess each new customer’s financial circumstances and tailor the right solution for that customer,” he added.
Its interest rate promotion runs until 22 November 2019 and applies to customers working with brokers as well as customers approaching Pepper directly. It features a prime variable interest rate from 3.12% p.a. for both principal and interest and interest only loans across various LVR brands.
Updated home loan serviceability rate
Pepper has also joined other lenders in lowering its serviceability floor interest rate and interest rate buffer across Pepper’s entire residential mortgage home loan range. As of the start of October the floor was lowered from 7.25% to 5.85% and its interest rate buffer increased from 2% to 2.5%.
This comes after APRA announced it would no longer expect banks to assess home loan applications using a minimum interest rate of at least 7%.
Milburn said the non-bank was “particularly excited” to announce the changes to its serviceability floor and buffer.
“Lowering the serviceability floor and raising the buffer, combined with the promotional rates for new prime customers, creates a strong offering for brokers to offer their customers,” he added.
“For those customers who are on the cusp of making a decision about a new home loan but are yet to make up their minds, this offering may be the deciding factor.”
Continuing to navigate the environment
Understanding the important role of brokers, Milburn said Pepper would continue to be responsive to market changes like rate cuts and would work closely with brokers to simplify the lending process.
“The lending market is complex and highly dynamic, and there’s a sometimes-overwhelming array of loan options available, so customers really depend on brokers to help them navigate the market confidently,” he said.
“In turn, Pepper is committed to helping brokers stay informed on market developments, and to providing brokers with appealing promotions and products that answer their customers’ needs. At Pepper, we pride ourselves on helping brokers streamline the process for customers, keeping it simple, straightforward and stress-free.”
You can catch Aaron Milburn speaking at MPA’s live-streamed Non-Banks Panel on 30 October from 12.30pm. Register for that and this week’s Major Banks Panel here.
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