Target Market Determination Document (TMD).

TMD for Non Conforming Loans home loan products issued by Pepper Finance Corporation Limited ACN 094 317 647 AFSL and Australian credit licence 286655

1. About this document

This Target market Determination (TmD) provides information about the target market for Pepper money’s non-conforming home loan product. it outlines the likely objectives, financial situation and needs of the target market as well as the key attributes of the product.

This document is not to be treated as a full summary of the product’s terms and conditions and is not intended to provide financial advice. refer to the product terms and conditions detailed below when making a decision about this product:

• general Terms & Conditions
• Pepper money Loan agreement
• mortgage Common Provisions

           Target market determination date

25 July 2024

      2. Product

Non-Conforming Home Loan

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

• Satisfy our eligibility criteria, including (but not limited to) the following:
  • must be 18 years or older at the time of
  • must be a resident of
  • Be able to demonstrate their capacity to repay the loan over a sustained period of
  • may have adverse credit
• require a loan secured by owner occupied or investment residential real property for the purpose of:
  • Purchasing or refinancing residential real
  • refinancing a loan secured against residential real
  • accessing equity in a residential real property including for debt consolidation

Some product features may alter the target market. See below for details.

           Key product features and attributes

This product has the following features and attributes:

• Variable and fixed interest rate
• Part fixed rate, part variable rate split loans
• Principal and interest and interest only (io) repayment
• io for up to 5 years after which payments revert to Principal and
• 100% interest offset sub-account available with Visa debit card access1 on a variable rate
• maximum Loan to Value ratio (LVr) 95%2
• maximum loan amount a$5,000,000, minimum loan amount a$50,0002
• maximum loan term 40 years, minimum loan term 10 years2.
• repayments available monthly, fortnightly and

1 Visa debit card issued by indue Limited aBN 97 087 822 464 and distributed by Pepper finance Corporation Limited aCN 094 317 647 and/or through Pepper money accredited mortgage brokers.

2 The maximum term, loan amount, fees and charges and Loan to Valuation ratio will vary depending on the consumer’s circumstances, including the method of income validation and credit history. e.g.,

discharged bankrupt or defaults. Refer to the key product attributes to ensure that the available product options meet the consumer’s likely objectives, financial situation and needs.

• ability to redraw additional repayments made on a variable rate
• access to manage loan online including
• Pricing for risk:
  • if a loan is approved, the interest rate offered and fees and charges will depend on our assessment of a number of factors at the time of application including the consumer’s credit history income and financial position, the LVr, the loan term and

the nature of the security property. a risk loading may apply.

• fees and charges2 include:
  • establishment fee
  • monthly account keeping fee
  • fixed rate Lock fee
  • Legal fee
  • Discharge fee

other fees and charges may apply, as set out in the loan agreement.

 Sub target market for consumers with 100% interest offset sub-account feature

 This feature is likely to be appropriate for consumers within the target market who:

• Have surplus cash and want to use this to reduce the interest payable on their loan while retaining access to their
• Want the availability of a Visa debit card1 for everyday access to additional funds held in the offset sub-account, including at The 100% interest offset sub-account feature is not available with a fixed interest rate loan.

   Sub target market for consumers with a variable interest rate home loan

 This feature is likely to be appropriate for consumers within the target market who:

• Will benefit from the additional loan features available with a variable interest rate loan who understand and are able to manage repayments which can change at any time.
• are likely to have the ability to make extra repayments, at any time, up to the outstanding loan

Consumers can choose to have a split loan with a variable interest rate and fixed interest rate portion providing repayment certainty in relation to the fixed interest rate portion and the ability to have an offset sub-account, redraw facility and Visa debit card1 available on the variable interest rate portion.

           Sub target market for consumers with a fixed interest rate home loan

 This feature is likely to be appropriate for consumers within the target market who:

• require the certainty of a fixed interest rate and fixed repayments for a fixed period up to 10 years, understanding that they will not benefit from interest rate decreases during the fixed rate period.
• Will not need access to any additional repayments made to their loan during the fixed interest rate
• Benefit from having the repayment certainty offered by a fixed rate even though any additional repayments made during the fixed interest period cannot be accessed.
• may need to break their fixed rate loans prior to the end of the fixed period and will benefit from a product which does not charge break costs.
• may want to have an io period during the period of the fixed interest

Consumers can choose to have a split loan with a variable interest rate and fixed interest rate portion providing repayment certainty in relation

to the fixed interest rate portion and the ability to have an offset sub-account, redraw facility and Visa debit card1 available on the variable interest rate portion.

Consumers have the option to lock in a fixed interest rate at application stage (fees apply).

1 Visa debit card issued by indue Limited aBN 97 087 822 464 and distributed by Pepper finance Corporation Limited aCN 094 317 647 and/or through Pepper money accredited mortgage brokers.

2 The maximum term, loan amount, fees and charges and Loan to Valuation ratio will vary depending on the consumer’s circumstances, including the method of income validation and credit history. e.g.,

discharged bankrupt or defaults. Refer to the key product attributes to ensure that the available product options meet the consumer’s likely objectives, financial situation and needs.

This feature is likely to be appropriate for consumers within the target market who:

• Want to pay down their outstanding loan balance on a regular basis in addition their interest repayments, to save on interest over the term of the loan and build equity in the property.

This feature is likely to be appropriate for consumers within the target market who:

• Will benefit from the ability to pay interest only on the outstanding loan balance for the duration of the interest only
• Understand that they may pay more interest over the life of the loan as not paying down principal during the interest only interest only is available for a maximum period of 5 years, after which repayments will revert to Principal and interest.

This product allows consumers to finance the purchase or refinance of an owner-occupied residential property and make principal and interest repayments in order to reduce the loan balance and build equity in the property.

This product allows consumers to finance the purchase or refinance of an investment residential property with the ability to select principal and interest repayments to reduce the loan balance and build equity or interest only repayments for a maximum of 5 years for tax purposes.

This product allows consumers to access part of the equity in their owner occupied or investment residential property to use the funds for an approved purpose in accordance with our lending criteria. acceptable purposes include purchasing another property; home improvement, debt consolidation or investment.

This product may not be appropriate for individuals who:

• Do not satisfy our non-conforming home loan eligibility criteria;
• may qualify for our Prime home loan product;
• Need to borrow greater than 95% LVr;
• require a loan term greater than 40 years;
• are borrowing to construct a dwelling;
• Do not have ongoing income and/or employment;
• Cannot demonstrate their capacity to repay the loan over a sustained period; and/or
• require a line of credit

Pepper may also exclude consumers based on factors including, but not limited to, loan purpose.

1 Visa debit card issued by indue Limited aBN 97 087 822 464 and distributed by Pepper finance Corporation Limited aCN 094 317 647 and/or through Pepper money accredited mortgage brokers.

2 The maximum term, loan amount, fees and charges and Loan to Valuation ratio will vary depending on the consumer’s circumstances, including the method of income validation and credit history. e.g.,

discharged bankrupt or defaults. Refer to the key product attributes to ensure that the available product options meet the consumer’s likely objectives, financial situation and needs.

      4. How this product is to be distributed

           Distribution channels and conditions

 This product is designed to be distributed through the following channels:

• Pepper money accredited and licensed mortgage brokers subject to Best interests Duty and Licensed intermediaries (Third Party Channel); and
• Directly via appropriately authorised Pepper money employees (Direct Channel).

The distribution channels are appropriate because:

• The product has a wide target
• Pepper money’s Third-Party Channel consists of accredited brokers that are subject to a higher duty under Best interests Duties to ensure that the product is in the best interests of the particular consumer and Licensed intermediaries.
• Pepper money’s Direct Channel distributors have been adequately trained and have the necessary skills and knowledge to distribute this product in accordance with the TmD.
• Pepper money’s application and approval process has controls in place to ensure all approved consumers meet our eligibility and lending requirements.
• Pepper money conducts adequate training, upfront and ongoing due diligence and monitoring of distributors including the ongoing provision of information to these distributors.

      5. Reviewing this target market determination

Pepper money will review this TmD in accordance with the following:

review periods

First review date: within twelve months of the effective date. Periodic reviews: every twelve months after the initial review and each subsequent review.

review triggers

This TmD will be reviewed if any of the events should occur: •      There is a material change to the product including to the fees or the terms and conditions of the product, except where the TmD has there is a material change to the product including to the fees or the terms and conditions of the product, except where the TmD has already been reviewed in relation to that change; •      There is a material change in the regulatory requirements in relation to the product, except where the TmD has already been reviewed in relation to that change •      A significant dealing of the product to consumers outside the target market occurs; •      external events such as adverse media coverage or regulatory attention suggest that the target market for the product might not be appropriate; •      There is a material, unexpected increase in complaints, declined applications, clients in default or hardship when measured against approved metrics, determined by reference to our Design and Distributions obligations (DDo Policy); or •      We receive correspondence from a regulator, including a regulatory order or direction (including the use by aSiC of its Product intervention Powers) that expressly states or directly implies that this TmD is no longer appropriate.

Where a review trigger has occurred, this TmD will be reviewed within 10 business days.

      6. Reporting and monitoring this target market determination

The following information must be provided by Pepper money distributors to Pepper money in relation to the distribution conduct of the Pepper money Home Loan product, if not available to Pepper money.

Distributors should provide all reporting to ddoreporting@pepper.com.au

Type of information	Description	reporting Period
Specific complaints received in relation to the product, Pepper money or the distributor	Written details of the complaint, including name and contact details of complainant and substance of the complaint.	Within 5 business days from the date of the complaint.
Number of complaints received in relation to the product, Pepper money or the distributor	Number of complaints.	Quarterly, and in any case no later than 10 business days* from the end of the quarter or from receiving a request from Pepper money.
Significant dealings	Any significant dealing which is not consistent with this TmD including: •        The date on which or the date range over which the dealing occurred; •        a description of the dealing; •        an explanation of why the dealing is considered significant; •        an explanation of why the dealing is considered to be inconsistent with the TmD; •        How the dealing was identified (e.g., through monitoring, complaints etc.); and •        Detail of what steps have been or will be taken in relation to the significant dealing.	as soon as practicable, and in any case within 10 business days* after becoming aware

*Business day is a day that is not a Saturday or Sunday, a public holiday or bank holiday in New South Wales.

¹ Credit services for Non Conforming Loans products are provided by Ausco Trading Pty Ltd ABN 95 003 585 662 Australian Credit Licence 386838 (“NCL”) and its appointed representatives. Credit for Non Conforming Loans products is provided by Pepper Finance Corporation Limited ACN 094 317 647 (“Pepper”). Pepper Money Limited ACN 094 317 665, Australian Credit Licence 286655 acts on behalf of Pepper.