Resimac cuts rates for self-employed borrowers

Resimac has announced that it has made rate cuts and waived some of its fees across its prime alt doc range of home loans in what it said is a bid to support self-employed borrowers to invest in property or to refinance and consolidate their debts.

The lender has slashed interest rates to 2.99 per cent per annum (3.03 per cent per annum comparison rate) for owner-occupied principal and interest loans for both 70 per cent and 80 per cent loan-to-value ratio (LVR).

This represents a reduction of 48 bps at 70 per cent LVR and 88 bps at 80 per cent LVR.

The lender has announced similar reductions for investor loans and loans with interest-only repayments, and is offering a 3.29 per cent per annum (3.33 per cent per annum comparison rate) interest rate for both 70 per cent and 80 per cent LVR for investor (principal and interest) loans, and 3.44 per cent per annum (3.38 per cent per annum comparison rate) investor loans with interest-only repayments.

Furthermore, the lender has waived risk fees for the prime alt doc products across all LVRs, representing a saving of 0.50 per cent up to 70 per cent LVR and 1.00 per cent between 70 per cent and 80 per cent LVR.

In addition, Resimac has reduced rates across all specialist full doc and alt doc products by 50 bps, and is waiving the risk fee for loans up to 70 per cent LVR.

Rates will now start from 3.37 per cent per annum (3.47 per cent per annum comparison rate) for the specialist full doc clear (owner-occupied principal and interest) product.

The new rates are applicable to all new applications received from 15 March, Resimac said.

Rollback of temporary 2020 changes

Resimac has also announced that it has rolled back some of the temporary loan documentation requirements introduced in 2020.

This includes the rolling back of some of the additional checks and documentation requirements that were temporarily added in 2020, as well as broadening some policies for the self-employed.

From 15 March, the following changes will apply:

• For full doc self-employed applicants, the lender will no longer require the most recent quarter’s business activity statement (BAS) (or for Victorian applicants, the most recent 30 days bank statements) to accompany the application. Instead, loans will now only require the 2019 and 2020 financial statements and taxation returns
• Alt doc self-employed applications based in Victoria no longer require the most recent 30 days bank statements in addition to the usual income verification documents. Applications can be submitted using an accountant’s letter, six months’ BAS or three months’ business bank statements
• Specialist clear full doc applications for self-employed can now be submitted using just 12 months’ financial statements and tax returns (must be financial year 2020), with the most recent quarter’s BAS provided in support
• Specialist plus alt doc applications up to 75 per cent LVR can have their income verified by either an accountant’s letter, six months’ BAS or three months’ business bank statements (where the LVR exceeds 75 per cent, six months BAS or three months business bank statements must be provided)

Furthermore, the lender has stated that the mandatory requirement for specific notes on the impact of the COVID-19 crisis will no longer be required. It said that commentary would only be required if applicants have been impacted by any “recent event”.

“Where the applicants indicate they have been impacted, additional documentation or commentary must be provided (for self-employed applications this must be the most recent BAS),” Resimac said.

Commenting on the changes, Resimac general manager distribution Daniel Carde said that they were designed to provide self-employed borrowers with access to credit “at a time it could make a material difference.

“There are many self-employed Australians who will need more support this year as they get back on their feet and transition back to normality after almost 12 months of disruption,” Mr Carde said.

“Refinance activity was particularly strong in 2020; however, many self-employed borrowers were effectively shut out of the market due to the economic uncertainty caused by the pandemic. We’re looking to change that in 2021 by reducing our interest rates and removing almost all the entry costs on our range of prime alt doc loans.

“With the economy already showing signs of a strong recovery, we are also removing some of those temporary documentation requirements introduced in 2020, making the process of applying for a loan simpler.”

Mr Carde concluded: “This is a great opportunity for brokers to reach out to the eligible borrowers in their customer base to see if they can help lower their repayments and consolidate any other debts they may have accumulated by assisting them to refinance their current home loan.”

[Related: Resimac records strong profit as book nears $13bn]

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.