Online lender myrate.com.au claims it offers more affordable mortgage products than the CBA's packaged home loan, recently judged the best deal in the country by Canstar Cannex.
The research group said CBA "now offers the lowest mortgage package rate - 6.04% for a $250k loan".
But the mortgage manager, which is funded by ING, hit back claiming this product carried with it "huge annual fees of $350".
Myrate.com.au claims to offer a cheaper interest rate without a heavy annual fee.
Its website offers a rate of 5.99% for a mortgage of less than $600,000 and a rate of 6.03% for a mortgage great than $600,000 with no application, valuation, legal, settlement, redraw, additional repayment or ongoing fees.
Managing director, Kevin Sherman, said: "If families paid the typical $350 packaged loan annual fee into a myrate.com.au loan instead, they'd shave almost two years off their loan." (Based on a loan of $300,000 over the course of 25 years).
In its release, Canstar Cannex claimed the days of non-banks pipping the major lenders on rate were over.
"Traditionally, non-bank lenders offered the lowest mortgage rate but the unstable funding environment has thrown up an opportunity for banks to steal market share from non-banks by selling more loans with a lower margin," said Canstar Cannex financial analyst Frank Lopez.
Canstar Cannex said the major drawcard of a loan package is the home loan itself with its discounted interest rate, which applies for the life of the loan.
It said the package deal was "sweetened" with the addition of a free transaction account and a free credit card.
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