UBank are to offer a route around the saving required to get onto the property ladder by raising their Loan-to-Value Ration (LVR) threshold and waiving the requirement to pay Lenders Mortgage Insurance (LMI).
As the property boom sees prices rise and First Home Buyers (FHB) race to get onto the ladder, this new offer represents a point of difference in lending providers.
There had been an ongoing interest rate price war, with rates slashed in an attempt to entice customers, but with numbers now seemingly as low as they can go, UBank have struck out with this new proposition to help bring FHB business their way.
“We look forward to continuing to offer really sharp, customer-focused home loan products as we move forward with our 86 400 partnership and begin working with their broker lending business,” said UBank CEO Philippa Watson.
“We’re really pleased to be able to offer loans up to 85% without lender’s mortgage insurance so that the money that would be used on insurance can be used as a deposit or for paying down a loan.”
LMI is generally required on home loans with a LVR of above 80%, but by waiving the fee, UBank can now chop that price of First Home Buyers’ costs. Their standard rate for those above 80% LVR will start at 2.49% variable or 2.05% fixed for owner occupiers.
The decision comes as the government is set to announce a Federal Budget that continues to offer options for First Home Buyers to get onto the property ladder.
The First Home Loan Deposit Scheme (FHLDS) has been renewed, including the provision that waives LMI for those paying less than 20% of the property price as a deposit.
27 lenders are participating in the scheme, including UBank’s parent company, NAB, but not Ubank itself.
