Bank resumes investor lending, launches 98% LVR loan

Teachers Mutual Bank and UniBank this month announced they will accept applications for investment properties following a temporary withdrawal from the market to meet regulatory expectations.

Teachers Mutual, which merged with UniBank in August last year, said its decision to recommence lending to residential property investors comes after careful consideration of its investment lending portfolio and market conditions.

“Over the past three months we have closely managed our investment lending portfolio which has seen growth slow in line with the bank’s expectations and to meet APRA’s annual 10 per cent guideline,” Teachers Mutual Bank deputy CEO Brad Hedgman said.

“We are pleased to be in a position to return to the market. Our focus now will be working closely with our members and third-party distribution channel to address their needs while still adhering to our regulatory responsibilities.”

“To ensure a steady flow of business in this sector we will continue to proactively monitor our growth and adjust our lending measures as needed,” Mr Hedgman said.

Australian investors will again have access to variable and fixed rate home loans along with a 100 percent mortgage offset option through products such as the Teachers Fixed Option Investor Home Loans and Solutions Plus Investor Home Loan, he added.

Teachers Mutual this week announced that UniBank has entered the third-party channel, a decision based on the strong mortgage growth and settlements volumes Teachers Mutual has seen since it began partnering with brokers in 2013.

Speaking to Mortgage Business, Teachers Mutual Bank’s national manager of third-party distribution, Mark Middleton, said he has already received calls from brokers interested in the UniBank offering.

The lender’s new first home buyer product includes a 98 per cent LVR (including LMI) and a 40-year term.

“It’s hard to get into the market right now. The 98 per cent lend and 40-year term is a great product,” Mr Middleton said. “The main aim here is to help people get into the market.”

In the past financial year Teachers Mutual has seen a 33 per cent increase in home loan settlements. Mr Middleton anticipates a similar trend with UniBank.

He said brokers will have the opportunity to significantly expand their potential customer-base and be able to provide them with tailored products unique in the financial sector, including 100 per cent mortgage offsets on fixed and variable products.

The mutual bank partners with 12 aggregators and over 2,000 accredited brokers across Australia, with National Mortgage Brokers (nMB) and Australian Finance Group (AFG) the most recent additions.

Mr Middleton said the mutual has plans to continue to increase its broker reach via its existing aggregator panel over the next few years.

[Related: Bank gives brokers access to 4 million potential borrowers]