Pepper Money and Homeloans Limited have made changes to their construction loan offerings, with both lenders stating that the changes are designed to ensure that a “balanced construction portfolio is maintained”.
Effective immediately, Pepper will no longer accept construction applications where the loan is for investment purposes for its Near Prime Construction Home Loan product suite, and where the loan-to-value ratios (LVRs) are greater than 85 per cent for its Prime Construction Home Loan product suite.
Pepper has also made changes to maximum loan amounts on its Prime Construction Home Loan products where the loan is for investment purposes.
In a statement to brokers, Pepper noted: “These changes are aimed at ensuring a balanced construction portfolio is maintained and do not impact any of Pepper Money’s other lending products or construction products where the borrower intends to live in the dwelling [owner-occupied].
Meanwhile, Homeloans has announced similar changes, stating that, effective immediately, it will no longer accept construction applications where the loan is for investment purposes for its Homeloans Accelerate Red product suite, and where LVRs are greater than 85 per cent for its Homeloans Accelerate Prime product suite.
The non-bank lender has also stated that it has made changes to maximum loan amounts on its Homeloans Accelerate Prime Construction Home Loan products where the loan is for investment purposes.
In a statement to The Adviser, Homeloans said: “The vast majority of Homeloans’ construction loans are on the Homeloans Ultra Plus and MoniPower products, which remain unchanged.
“However, due to a change in policy from one of Homeloans’ funding sources, construction is no longer available on the Homeloans Accelerate Red, which is a niche near-prime product.
“It’s also no longer available above 85 per cent LVR on Homeloans Accelerate Prime product.”
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