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With serviceability tightening and borrowers feeling the pinch, we have asked brokers: what loan products are you (and your clients) loving at the moment?
100% LVR business loan from Westpac Group
St.George is offering a 100 per cent loan-to-value ratio business loan for secured loans that allows businesses to leverage against existing security.
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There’s obviously risks with that, especially if you’re using the family home, but it might just give businesses a little bit more flexibility to grow into and to get access to cash flow.
For example, we’ve got a client at the moment who just purchased a business off a competitor and we actually had to reduce their home lending and attach an unsecured debt to it in order to achieve that purchase. However, if we had the extended LVR, which is now being offered through Westpac and St.George Group, they potentially wouldn’t have had to do that, which would have offered them better terms going forward and a better rate.
Matt Turner, GSC Finance Solutions
NAB loans for mortgage brokers
We’ve recently had great success with NAB’s loan for mortgage brokers, where they lend against your trail income and the future growth of your broking business to provide capital for business expansion.
Their product suite also enables real estate businesses that have a strong rent roll to lend against this and Bernadette [Christie-David] has been successfully working on a number of these client scenarios recently.
They have a great process and a strong commercial team at NAB that is pragmatic and open to supporting ambitious business owners.
Aaron-Christie David, Atelier Wealth
No presale requirements from Westpac Group
Westpac Group is offering a very competitive presale constructive offering compared to the other majors – they’re offering no presale requirement for solely town house developments that are up to 20 dwellings on a 50 per cent LVR and can do up to 65 per cent LVR for the right project. This is a big push in construction policy from Westpac and shows that they’re putting a lot of value on increasing the supply of town house projects to the market.
The change recognises the strength and depth of demand and supply shortages in the Australian major cities. They’re allowing developers to hold their residential units before they complete.
I’ve got quite a lot of loans that were in the application stage with non-banks, but as soon as I found this out, I moved them out to the bank. That means my developer clients aren’t having to pay interest in the range of 12 per cent with a non-bank construction rate with no presales, instead they’re bringing them down to the bank’s 6 per cent rate with no presales.
Melissa Ashcroft, AAA Mortgages
Let us know what products you are loving at the moment in the comments below.
[Related: The Word: What loan products do brokers want to see more of?]
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