New product allows eligible borrowers to enter the market with as little as a 2% deposit
Mortgage aggregator Connective has added a low-deposit lending product to its white-label portfolio through a partnership with non-bank lender Skip.
The product, called Connective Skip, is available exclusively to the aggregator's more than 5,400 member brokers. It allows eligible borrowers — including investors — to access a home loan with a deposit as low as 2%. In certain circumstances, the solution may offer borrowers up to 30% greater purchasing power compared with standard 95% LVR lending with Lenders Mortgage Insurance.
The launch comes as deposit affordability remains a key obstacle for prospective buyers. According to PropTrack, Australians now take more than five and a half years on average to save a 20% deposit. Cotality data shows housing values have continued to climb at a pace that outstrips wage growth, as measured by the Australian Bureau of Statistics.
"Brokers are increasingly working with clients who have the capacity to service a loan but are held back by the time it takes to save a deposit," said Michael Goerner (pictured top), head of Connective Lending. "Connective Skip is designed to give brokers a practical pathway to progress those scenarios, particularly where deals may otherwise stall, while still aligning with the client's financial position and goals. It's about expanding the range of options brokers can confidently bring to the table in a more constrained affordability environment."
Goerner noted that many borrowers with sound serviceability find themselves caught between rising property prices and lapsing pre-approvals. "Brokers are seeing more clients who can comfortably service a loan but are stuck in a cycle of saving, rising property prices and expiring pre-approvals," he added. "Connective Skip provides a new pathway to break that cycle and help those clients move forward with confidence."
Skip co-founder and chief executive Mario Emmanuel (pictured right) said the arrangement would broaden the reach of the product through the broker channel. "Partnering with Connective allows us to scale access to a solution designed for a growing segment of borrowers who are being left behind by traditional deposit requirements," Emmanuel said.
"Through the broker channel, we're enabling more clients with strong fundamentals to take the next step in their property journey, while helping brokers support a wider range of scenarios."
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