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Available from 6 October, the Extended Home Loan offers terms of up to 40 years, with serviceability assessed over a maximum 35-year period.
The product is available for owner-occupied and investment lending, with an LVR of up to 95 per cent, inclusive of risk fees, and can be used for construction.
Owner-occupiers can access a 40-year term up to the age of 45, with interest-only repayments available for up to five years. Investors can access interest-only terms of up to 10 years.
Eligible borrowers, including PAYG and self-employed applicants, as well as companies and trusts, will also have access to an offset facility, unlimited additional repayments and redraw.
Michael Csavas, chief commercial officer at ColCap Financial, said the product was designed to give borrowers greater flexibility over their repayments and cash flow.
“With the potential to assess a client's ability to service over 35 years, and packing in features to help them pay their home loan down sooner, we believe this will appeal to a range of borrowers who can use the 40-year product structure to their advantage," he said.
“The 10-year interest-only investor option may also support clients’ tax planning following significant changes to the tax regime for property investors”.
SMSF lending limits increased to $5m
Granite has increased its maximum SMSF loan size from $3.5 million to $5 million for commercial property lending and residential refinancing.
The lender said the higher limits would give SMSF borrowers greater scope to consider commercial property investments.
“We're supporting SMSFs by raising our maximum SMSF commercial loan limit from $3.5 million to $5 million – and we're doing the same for SMSF residential refinancing. This provides additional bandwidth for SMSFs assessing investment potential of commercial,” Csavas said.
Granite will also limit the rate increase for SMSF borrowers, passing on just five basis points for residential property refinancing. All SMSF commercial rates will also rise by less than the RBA’s cash rate increase.
Granite limits rate increases
Granite will not pass on the RBA’s latest cash rate increase in full, with standard owner-occupied rates for loans up to 80 per cent LVR rising by 0.15 percentage points and standard investment rates in the same LVR band increasing by 0.05 percentage points.
For loans above 80 per cent LVR, rates will either remain unchanged or fall by up to 0.65 percentage points, depending on the borrower, LVR band and product.
Csavas said the changes were aimed at giving brokers more options as borrowers contend with affordability and serviceability pressures.
“In a rising rate environment, brokers know their clients are facing challenges in achieving the property they want, whether they're first homebuyers, upgraders looking at a bigger home, or investors looking for the right opportunities to build long-term wealth."
"We're taking that head on with stronger rate competition and product innovation. We believe we’ve created a ground-breaking 40-year home loan offering, that will give borrowers options they didn't have before - what Granite's always been about."
[Related: RedZed launches EasyRefi as SMSF lending enters new era]
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