Homeside have announced new pricing structure for variable interest rate home loans.

The tiered discounts and interest rates for new Homeside Homeplus loans will be based on both;

• a customer’s aggregate Homeside borrowings; plus
• the Loan to Value Ratio (LVR) on the new application.

For new home loan applications with total Homeside lending of $250,000 or more and where the LVR is up to 75% the new rate effective 16 October 2009 will be 0.80% p.a. off their standard variable rate. The discount of 0.80% p.a is effective from 16 October 2009 and is for new loan applications with total Homeside lending of $250,000 or more and where the LVR is up to 75% the maximum discount will apply.  It is a reduction of 0.80% pa on the standard variable rate (unpublished).

Additional rules relating to the new structure;

• Existing properties will not be included in the LVR calculation of a new loan unless they are cross-collateralised
• Interest rates for existing Homeplus loans will not change unless a variation is made and the existing loan is recontracted

Typically loans with lower LVRs do not require a valuation (with a contract of sale) or mortgage insurance, and are on average more straightforward to underwrite. This means we can process these loans very quickly where all supporting documentation is provided upfront, and so deliver a great service experience to clients.  It also means that the cost of application processing for these loans is lower than for higher LVR applications.

Homesides new pricing structure reflects this difference in their processing costs, and also reflects the fact that, on average, lower LVR loans have a better credit risk experience.

Homeside have also announced a rationalisation of the Homeside product range. The following Homeside products will be removed from sale from 30 November 2009:

• Plain and Simple Home Loan
• Offset Home Loan
• Reducible Mortgage Loan
• Homeplus 1 Year Introductory fixed rate

Please note that existing Homeside customers in these products will continue to be able to vary or increase their existing loan facilities.

Homeplus will be positioned as the core product to meet the majority of customer needs. The Peak Performance Equity Mortgage and Fixed Rate Interest Only are positioned to meet the specific needs of some customer segments.

Send your home loan application details to Ability Finance brokers who can calculate and compare the benefits of this new home loan offer for you.