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As of today, Teachers Mutual Bank will make changes to its loan origination servicing calculator, which will require brokers to select the desired product and the correct product’s interest rate.
From today (17 September), Teachers Mutual Bank (TMB) will update its loan origination servicing calculator available through the TMB Broker Portal and NextGen.Net’s ApplyOnline system.
As well as updating the minimum benchmark figures used in the bank’s serviceability assessment to reflect the Q2 2019 Household Expenditure Measure, there will be new mandatory requirements for brokers when using the revised Loan Origination Servicing Calculator.
Users will now need to select the desired home loan product and enter the correct product interest rate at that time.
The calculator will automatically add the interest rate buffer and determine whether to use the assessment rate or the floor rate to assess serviceability.
TMB – which includes Firefighters Mutual Bank, UniBank and Health Professionals Bank – lowered its interest rate floor from 7.25 per cent to 5.5 per cent and increased its buffer rate to 2.5 per cent on 26 July, in response to APRA’s changes to its home lending guidance, in which it scrapped the 7 per cent interest rate floor for mortgage assessments and increased the buffer rate to 2.5 per cent.
As of today (17 September), the calculator will automatically add the interest rate buffer and determine whether to use the assessment rate or the floor rate to assess serviceability.
TMB has advised that applications that have been conditionally approved prior to today, but not funded, do not need to be reassessed under the new lending policy.
Likewise, applications where the conditional approval has expired (such as a 90-day approval period), will be assessed using the applicable lending policy at that time.
However, all new applications submitted from today (17 September) onwards will be assessed under the new lending policy.
[Related: Serviceability changes could be ‘offset’ by expense process]
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