Target Market Determination (TMD)

Home loan for the purpose of refinance

1. About this document

The purpose of this document is to provide information about the class of consumers for whom this product has been designed, having regard to the likely objectives, financial situation and needs of consumers within the target market.

This document does not contain a summary of the product’s terms and conditions. Customers should refer to the Credit Guide, Key Facts Sheet and Loan Contract before making a decision about the product.

This TMD applies to Nano’s home loan product which has different interest rates for the following categories:

  • Owner occupied, principal and interest
  • Owner occupied, interest only
  • Investor, principal and interest
  • Investor, interest only

2. Issuer

The issuer of this product is Digital Mortgage Solutions Pty Ltd ABN 85 628 608 391 Australian Credit Licence 511406 (trading as Nano Digital Home Loans) (Nano, we and us).

3. Class of consumers that fall within this target market

The information below summarises the overall class of consumers that fall within the target market for Nano’s home loan, based on the product features, including its key attributes and the objectives, financial situation and needs that it has been designed to meet.

The features of this product, including its key attributes, have been assessed as meeting the likely objectives, financial situation and needs of consumers who:

  • are:
    • at least 18 years old;
    • individual borrowers (as single or joint borrowers); and
    • an Australian citizen or a permanent Australian resident;
  • satisfy our eligibility criteria;
  • are considered a low to medium credit risk;
  • require a loan for the purposes of refinancing an existing residential owner-occupied or investment loan
  • are able to provide acceptable real property security;
  • require a maximum loan-to-value ratio of 75% or less.

The overall purpose of the product is to provide consumers with a simple home loan product that has low variable interest rates, no fees and charges, an offset sub-account, payment capabilities including a Visa debit card, ApplePay, GooglePay, BPay and instant payments linked to the offset sub-account, all managed via a mobile app. Although variable interest rates fluctuate, the product allows consumers to make deposits into an offset sub account to reduce interest payable over the term of the loan, whilst retaining the ability to draw on those funds when required.

Nano’s home loan products have the following purposes:

Owner occupied, principal and interestA customer that wishes to refinance a primary residence and repay principal and interest over a loan term of up to 30 years in order to build equity in their property.
Owner occupied, interest onlyA customer that wishes to refinance a primary residence and pay interest only for up to 5 years before reverting to principal and interest for a total loan term of up to 30 years in order to build equity in their property.
Investor, principal and interestAn investor that wishes to refinance an investment property and repay principal and interest over a loan term of up to 30 years in order to build equity in their property.
Investor, interest onlyAn investor that wishes to refinance an investment property and pay interest only for up to 5 years for tax purposes before reverting to principal and interest for a total loan term of up to 30 years in order to build equity in their property.

Product features, including key attributes

  • Loan term of up to 30 years;
  • Minimum loan amount of $100,000;
  • Maximum loan amount of $2,500,000;
  • Potential cash out up to $200,000 for home improvements or for the acquisition of personal assets;
  • Monthly loan repayments;
  • Maximum loan-to-value ratio of 75%
  • No fees and charges (with the exception of government fees and charges);
  • Offset sub-account;
  • Mobile app enabling instant payments and transfers; and
  • Visa debit card linked to the offset sub-account.

Excluded class of consumers

This product has not been designed for individuals who:

  • are under 18 years old;
  • are bankrupt or a discharged bankrupt;
  • are self-employed and do not have a co-borrower with a PAYG income;
  • have household gross income less than $100K per year;
  • do not meet Nano’s lending and credit criteria;
  • have a loan to value ratio greater than 75%;
  • require a home loan for less than $100,000 or greater than $2,500,000;
  • require a home loan for a new purchase of residential property;
  • require fixed interest rates;
  • require a construction loan, debt consolidation of short-term credit contracts, purchase of vacant land funds for business or commercial purposes; or
  • require a loan for a purchase of non-residential property.

4. How this product is to be distributed

Distribution channels

This product is designed to be distributed directly by Nano via our digital application which is accessible on our website, www.nano.com.au.

Distribution conditions

This product will only be distributed to:

  • Individual borrowers (single or joint) that meet Nano’s eligibility requirements;
  • Borrowers that seek a product that meets the product features, including its key attributes; and
  • Borrowers that meet Nano’s lending and credit criteria.

Adequacy of distribution conditions and restrictions

Nano considers that the distribution channels and conditions are appropriate to direct distribution to the target market because:

  • distribution is conducted by Nano via one channel, providing Nano with the ability to ensure all consumers fall within the target market; and
  • our application and approval system has controls in place to flag applicants who may be outside the target market or provide us a reason for applying for a home loan with Nano that Nano does not support.

5. Reviewing this target market determination

We will review this target market determination in accordance with the below:

Initial reviewWithin 6 months of the date of this TMD.
Periodic reviewsAt least every year from the initial review.
Review triggers or eventsAny events or circumstances that would suggest the TMD is no longer appropriate,including:
  • A significant dealing of the product to consumers outside the target market occurs;
  • There is a material change to the design or distribution of the product,including related documentation;
  • There is a material change to the eligibility or credit criteria to be applied;
  • the occurrence of external events such as regulatory change;
  • and significant changes in metrics,including,but not limited to:
    • product performance: a material increase in the number of defaults,discharge rates and arrears;
    • complaints: a material increase in the number of complaints received in relation to the product.

Where a review trigger has occurred, a review of this target market determination will be completed within 10 business days.

6. Distribution Information Reporting Requirements

The following information must be provided to Nano by any person who engages in retail product distribution conduct in relation to this product:

Type of information Description Reporting period
Specific ComplaintsDetails of the complaint, including name and contact details of complainant and substance of the complaint.As soon as practicable and within 10 business days of receipt of complaint.
ComplaintsNumber of complaints and general feedback relating to the product and its performanceEvery 3 months
Significant dealing(s)Date or date range of the significant dealing(s) and description of the significant dealing (eg, why it is not consistent with the TMD) As soon as practicable, and in any case within 10 business days after becoming aware