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Brighten Home Loans drops servicing buffer to 2%

Publication Date: Thursday, 8 February 2024
This article originally appeared in Australian Broker

Buffer cut among 15 policy changes

Brighten Home Loans has announced more than 15 policy enhancements, including reducing its servicing buffer to 2% above the applicable rate.

The non-bank lender said these new policies address the serviceability concerns and the need for greater flexibility that have been highlighted as key challenges for brokers and borrowers.

Brighten CEO Jason Azzopardi (pictured above left) said Brighten’s agile approach to product development allows them to quickly deliver meaningful solutions to support brokers in today’s ever-changing market landscape.

“Being deeply focussed on enhancing the experiences of brokers and customers, we’ve listened to our brokers and implemented a raft of changes in our policies and products in response to their feedback,” said Azzopardi, who was appointed to his position in January

“These enhancements are set to improve serviceability across our range of products, streamline paperwork and documentation processes, and respond effectively to the evolving needs of our diverse borrower base.”

Improved serviceability

Aside from the 2% standard buffer, Brighten has also introduced an alternative servicing with a reduced buffer of 1% above the applicable rate for eligible refinance loans.

Azzopardi said the decision to lower the serviceability buffer was a response to market conditions that call on the lender to address ongoing affordability challenges. 

“Lowering the serviceability buffer increases aspirant homeowners’ borrowing capacity, especially in a high interest rate environment like this,” Azzopardi said. “With home prices remaining high and the cost of living increasing for many households, easing the buffer provides an adjustment to help more individuals and families achieve the dream of homeownership.

“We recognise that it is essential to ensure that borrowers are not over-leveraged, and we believe that the buffer adjustment is a sensible modification within the current economic landscape and represents a balance between fostering accessibility to homeownership and ensuring financial stability.”

Streamlined verification requirements

In recognition of the robust residential rental market, the rental allowance for all residential products has been increased to 90%.

Last year, Brighten introduced a one-year financials option for self-employed loans.

Building on this innovation, it now offers a company wages option, which allows self-employed borrowers to use 100% of their salary or director’s wages from the past six months for servicing.

To offer greater flexibility to the growing self-employed segment, Brighten has also streamlined its income verification process by removing the BAS requirement for 1-year financials that are more than 6 months old.

Empowering brokers to diversify and grow

Brighten also offers a comprehensive suite of competitive products tailored for full doc, alt doc, near-prime borrowers, as well as those seeking construction loans, bridging finance, and solutions for expats and non-residents.

Chris Meaker (pictured above right), Brighten’s head of sales, emphasised that diversification is essential for sustained growth in uncertain times.

“We are committed to arming brokers with the necessary tools and products for the ever-evolving property market,” Meaker said.

“Our latest policy enhancements address both immediate needs and prepare them for future opportunities in a diverse market.”

Brighten has also introduced the following non-resident policy enhancements specifically designed to support brokers working with expat and non-resident customers:

  • Category 2 locations are now accepted up to 60% LVR
  • Increased maximum loan size to $2.5 million for the Sydney and Melbourne metropolitan areas
  • Increased maximum loan size to $1.5 million for Gold Coast metropolitan areas
  • Increased maximum LVR to 75% for high-density apartment units
  • Additional PAYG income verification option of two consecutive payslips and three months bank statement
  • Australian Trusts are now accepted as one of the acceptable borrower types
  • The validity of offshore credit reports has been extended to 90 days from the date of formal approval.
  • For off-the-plan purchases with contracts older than 12 months, higher valuations up to the original contract price are accepted.