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Adelaide Bank rolls out construction lending to brokers

by Reporter5 minute read
Piggy bank, loan, lending to brokers, Adelaide Bank

The SA-based bank is now directly offering construction loans through the broker channel for both new and existing customers.

Although the bank already offered construction loans through its mortgage management business, the bank has now rolled out construction lending to the broker channel through the main bank.

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Brokers can now offer building loans to owner-occupiers and investors through the SmartFit, SmartFix, SmartDoc Variable and SmartDoc Fixed products.

With a standard building loan fee of $400, the construction loan holds the same interest rates as the standard product rates and can be offered on a principal and interest or interest-only basis for both fixed and variable rates. A 100 per cent offset and electronic redraw after construction term is included.

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The maximum loan-to-value restrictions are:

- 70 per cent for interest-only loans;
- 80 per cent for loans without lenders mortgage insurance (LMI);
- 90 per cent for investment principal and interest loans with LMI;
- 95 per cent for owner-occupied principal and interest loans.

A low doc option is also available.

Fons Caminiti, national manager for broker sales and distribution at Adelaide Bank, told The Adviser that the new offering comes off the back of broker demand.

He said: “When I got into the business [in 2013], I spoke to brokers, and particularly in South Australia where I’m based, they said that they were finding us a bit hard to use. For example, if they had a client who wanted to refinance but would build later down the track or build an investment property, they were looking to other lenders.

“So, we wanted to give our value proposition a bit more meat on the bone and provide brokers with an opportunity to use us for existing and new customers if they want to build an owner-occupier or investment property. So that is what has now transpired.”

Mr Caminiti added: “It still fits within our value proposition of keeping things simple. This is not for property developers, it’s not for people wanting to do multiple dwellings, it’s pretty simple stuff. But it just adds another string to our bow, and to our brokers’ bows as well.”

[Related: Sneak peek!]

Adelaide Bank rolls out construction lending to brokers
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