The non-major lender has reduced its floor rate in response to APRA’s new mortgage serviceability assessment guidance.
In response to the Australian Prudential Regulation Authority’s (APRA) new guidance, BOQ and its subsidiary Virgin Money Home Loans have reduced their interest rate floors for home loan serviceability assessments from 7.25 per cent to 5.65 per cent.
The lenders have also increased their interest rate buffers from 2.25 per cent to 2.5 per cent.
The changes are effective for all new home loan applications as of Monday, 29 July.
BOQ noted that the initial interest rate will be used for variable principal and interest loans, while a revert rate will be used for interest-only and fixed rate home loans.
The bank has updated its serviceability assessment calculator to reflect its new floor rate and buffer and has added a new “serviceability revert rate tool” to assist brokers with the calculation of assessment rates for interest-only and fixed rate home loans.
The non-major has also informed brokers that they will be required to use the new tool in conjunction with the serviceability calculator in order to receive the correct interest rates for the assessment.
All lenders that have amended their policies have also increased their buffer rates to 2.5 per cent, as per the regulator’s guidance.
Non-bank lender Resimac, although not officially bound by APRA’s guidance, has also adjusted its assessment rates, reducing its floor rate to 5.75 per cent and increasing its buffer rate to 2.5 per cent.
BOQ launches new broker website and ‘PropertyHub’ pilot
As well as announcing its new assessment rates, BOQ has also revealed the launch of two new services for brokers in line with its "commitment to continually improve the service [it] deliver[s] for brokers and customers".
The Queensland-based lender has announced the launch of its first broker website (boq.com.au/broker), which collates relevant broker forms, interest rate sheets and guidelines, among other resources. It is expected that the website's capacity will be developed further in due course.
BOQ has also commenced a pilot of property research group CoreLogic’s PropertyHub platform, which will run for three months until 24 October 2019.
According to the bank, PropertyHub is designed to “engage home buyers throughout their home buying journey” by providing readily available property insights and facilitating upfront valuations.
As part of the pilot group, brokers will be permitted to order upfront valuations at no cost for eligible property and location types during the pilot period.
BOQ has also added a new supporting document checklist (v0719) to ApplyOnline, which includes a heck-box where brokers can indicate that an upfront valuation has been ordered.
The launches coincide with the bank's inaugural BOQ Broker Roadshow, which wraps up in Melbourne on Thursday (1 August) and build on the new digital overhaul of its broker systems, spearheaded by its head of broker, Natasha Kelso.
[Related: Heritage revises assessment rates]
Charbel Kadib is the news editor on The Adviser and Mortgage Business.
Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.
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