Non-bank home loan provider Resimac has lowered its prime home loan servicing test rate, which it uses to assess how much money it can lend to borrowers. It says this new rate will help new borrowers access larger loans.
Resimac’s new prime home loan test servicing rate has now dropped to 5.50% from 6.00% for Prime Full Doc Loans, and to 6.00% from 6.50% for Prime Alt Doc Loans.
Read more: Resimac eases credit criteria
Resimac has been rolling out a series of rate cuts throughout June and August, and eased its credit criteria for investors in May following the government’s removal of loan-to-value restrictions (LVRs). The lender says its decision to reduce rates on its range of Prime mortgage products, and to offer a two-year fixed mortgage rate starting at 2.99%, will mean customers will have access to more borrowing, and it will cost them less.
Resimac New Zealand head Luke Jackson says the new changes are part of its strategy to offer mortgage advisers “competitive options” in a quickly changing market.
“Being agile and flexible continues to be essential in this current market,” Jackson said.
Read more: Resimac rolls out new low mortgage rates
“With this in mind, Resimac has reduced testing rates to reflect our ongoing commitment to provide mortgage advisers with lending options that are both responsible and relevant to the market.
Resimac’s last Prime Full Doc servicing rate reduction was made just over a ear ago, where the rate came down from 7.00% to 6.00%.
The new service level testing rates are effective for new home loan applications from 26 August.