Vow Voice 28th May 2020

ANZ has extended the offer of 2.59% p.a. for 2 and 3 year fixed rate terms on secured business loans until 30 September 2020.

The following changes will apply effective 23 May 2020:

• The offer now applies to the ANZ Business Loan (ABL) only. Excludes BML, Agri Finance Loan and asset finance loans.
• The offer has been extended until 30 September 2020.
• New flyers promoting the offer are attached.

The updated attached flyer can be provided to customers who want more information to read or take way. Please ensure you delete the previous flyer and only use the updated version provided with this communication.

Updated Flyer

ME is making changes to how mortgage broker commissions will be calculated. These changes reflect principles adopted by the Combined Industry Forum (CIF) and support the idea that remuneration should relate to loan size based on the funds drawn down and utilised by a customer net of offset or redraw.

As of 1 May 2020, in addition to the upfront commission a broker receives for a home loan based on the amount drawn rather than the total approved facility, a new loan will also be assessed on the 6 and 12-month anniversary date of the loan drawdown based on any additional drawn amounts since the upfront commission was calculated.

These amounts will be calculated minus any redraw or offset facility.

To reflect these changes and per clause 9.4 of the ME Retail Lending Aggregator Engagement Agreement ("Agreement"), ME is changing Schedule 1 of the Agreement. Please see attached a version of Schedule 1 identifying the changes together with a new clean version for inclusion within your existing agreement. The amendments will vary the respective commission payment from ME and has become effective for new home settlement as of 1 May 2020.

The additional commission will be calculated three business days from the 6 and the 12-month anniversary of the loan settlement date., and on the drawn amount minus any funds held in an offset or redraw account by the customer in excess of $10,000. The calculation will also consider any commission already received for drawn loan funds.

Everything else in the agreement, including the commission calculation for Top-up Commission and Trail Commission, remains unchanged.

Addendum to Schedule 1

The impact of COVID-19 on the Australian housing market has been deep and highly uncertain. Housing values have generally been well protected from financial shocks historically but have been relatively highly reactive to the recent credit tightening events.

Australian home values have seen an upward trend since mid-2019, however, the short-term outlook is marked by severe uncertainty and downside risk followed by a rebound as economic conditions recover, according to CoreLogic's recent report.

To delve deeper into this and see the numbers, please click on the attached report.

CoreLogic Report May 13, 2020

Westpac has announced that eligible interest-only (IO) home loan customers can now apply for term extensions of up to 12 months. Borrowers paying principal and interest (P&I) will also be permitted to switch to IO for 12 months.

Westpac's home loans general manager - Will Ranken, stated that the changes are to provide additional repayment relief for mortgage customers amidst the coronavirus environment. According to Ranken, more than 115,000 customers have deferred and continue to postpone mortgage repayments due to their COVID-19 consumer support package and some customers still want the option to continue making repayments at this time.

For the above reason, it has become much simpler for customers to apply for an extension in their interest-only loan term or, switch their repayments to interest-only. This comes amid calls for IO loan relief from policymakers after the Australian Prudential Regulation Authority (APRA) issued new guidance around serviceability assessments for borrowers amid the COVID-19 crisis. The regulator acknowledged that there might be "operational challenges" for ADIs in "evaluating the long-term impact of economic stress on borrowers due to COVID-19".

APRA stressed that such challenges "should not prevent changes to loan conditions where these are otherwise assessed to be prudent".

Accordingly, APRA revealed that while full serviceability assessments would continue to require for new lending, it would temporarily ease guidance for changes to existing loan terms, including the conversion of a P&I loan to IO.

"Over the next six months period, APRA, therefore, accepts that some ADIs may not be able to complete a full serviceability assessment for borrowers seeking a change in their loan conditions," the regulator noted.

"Such changes may include converting from principal and interest to interest-only, or for the extension of a loan term."

However, APRA noted that for conversions from P&I to IO "without a normal serviceability assessment", it expects that IO terms "would not exceed 12 months".

Source: Mortgage Business

At RESI, we have various funding options to help your Self-Employed customers obtain a home loan. Whether it's a refinance, purchase or cash-out, we have a number of products tailored to your clients' needs.

With options to provide just 1 form of income, our Alt Doc options are aimed at providing solutions to your clients. We can accept ABN registered from just 6 months!

For all your Alt Doc scenarios, please contact:

Brokersupport@resi.com.au or Tony Wakim on 0416 409 100 tony.wakim@resi.com.au

Take advantage of the RESI Flexi Options low fixed rates!

Flexi Options can do the below:

• Bridging finance
• Construction
• 100% offset on FIXED rates
• Complex financials
• 90% LVR Investment IO

For all scenarios, contact Tony Wakim, National Business Development Manager. Tony.wakim@resi.com.au, 0416 409 100 or you can contact our broker support team at brokersupport@resi.com.au

*WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.