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The new Mortgage Choice Skip product will allow eligible borrowers to access lending of up to 98 per cent loan-to-value ratio (LVR), with fees guaranteed to be lower than lenders mortgage insurance (LMI).
The product is targeted at borrowers who have the capacity to service a home loan, but are constrained by the size of their deposit.
Eligible borrowers will have access to interest rates starting from 6.39 per cent, owner-occupied and investment lending up to 98 per cent LVR, and refinancing up to 98 per cent LVR with cashout.
The product will also offer loan sizes of up to approximately $3.5 million, with no application, annual, or ongoing fees.
Mortgage Choice said the product could provide borrowers with up to 30 per cent increased purchasing power, while its fees are guaranteed to be lower than LMI.
Mortgage Choice CEO Anthony Waldron said the partnership comes as elevated property prices and the cost of living continue to make saving a deposit a significant hurdle for borrowers.
“The combination of elevated property prices and high cost of living means that many hopeful buyers are needing to put their purchase plans on hold or face having to pay high LMI rates to buy their first, or next, property,” Waldron said.
He said the product could be particularly relevant for borrowers who can afford to service a loan but have limited options because of their deposit size.
“Whether it’s first home buyers without the help of the ‘Bank of Mum and Dad’, buyers squeezed out of government scheme price caps, or upgraders looking to take their next step, Mortgage Choice Skip gives our network the ability to help borrowers get a ‘yes’ sooner,” Waldron said.
The launch marks the latest addition to Mortgage Choice’s expanding suite of white label solutions, which includes Mortgage Choice Freedom powered by Athena, Mortgage Choice Ignite powered by Pepper, and Mortgage Choice Amplify powered by Bluestone.
An untapped market
Since launching under its new name in February, Skip has been on a trajectory of growth.
The low-deposit lender has been appointed to aggregator panels, launched another white label with Connective, and partnered with NextGen to further expand its presence in the broker channel.
This growth has been underpinned by a segment of borrowers that Skip said is capable of servicing a mortgage, but may be underserved by the lending criteria of major banks.
Its loan book data shows that seven out of 10 clients taking out its loans are what it calls “second chance” owners.
These are people who have previously owned property, but no longer do, including young families, upsizers, divorcees, ambitious young singles, and first-generation Australians.
The cohort is made up of borrowers who are ineligible for the federal government’s 5 per cent Home Guarantee Scheme, but are capable of supporting a mortgage if the deposit barrier can be lowered.
To support its national rollout, Skip has also deployed dedicated business development managers across NSW, Queensland, Victoria, South Australia, and Western Australia.
The lender now writes around 75 per cent of its loans through the broker channel, up from 20 per cent the previous year.
Against this backdrop, Skip founder Mario Emmanuel said the partnership with Mortgage Choice reflected brokers’ understanding of the challenges facing borrowers with smaller deposits.
“For over three decades, Mortgage Choice brokers around Australia have championed home ownership for Australian families,” Emmanuel said.
“They know that when a borrower has strong earning capacity and a clean credit profile, the size of their deposit shouldn’t stand between them and home ownership.
“We’re excited to partner with them and bring Mortgage Choice Skip to market, allowing brokers to unlock home ownership for more hardworking Aussies.”
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