Leading mutual lender, Teachers Mutual Bank has unveiled a new low variable rate mortgage product.
The mutual’s new Classic Home Loan, available for new owner-occupied customers only, will attract a market-low variable interest rate of 4.11% (4.16% comparison rate).
Mark Middleton, national manager of third party distribution at Teachers Mutual Bank, says despite the timing of the product release – as many lenders increase variable rates – the new product is aiming to fill a gap in their product range.
“[Teachers Mutual Bank] has actually had a gap in our product range and we have been aware of it for quite some time, so this is not an attack on our other competitors. We are coming to market now with what we believe is the right product at this time for our owner-occupied market. The way we have reacted is we have a gap and we are plugging that gap with our product,” Middleton told Australian Broker
“I think the market is very hot in the owner-occupied space and I think for a period of time we have probably been left on the sidelines or in some ways we have being trying to combat with our fixed rate product – which is still a great product with a 100% offset on it – but we needed something there that is really in there amongst the mix of the leaders of the variable rate. This is why we have gone to market with this particular product.”
According to Teachers Mutual Bank, the product is only available for a limited time. However, Middleton told Australian Broker
that, depending on the uptake, it could become a permanent product offering.
“We are looking to offer [the Classic Home Loan] for several months, so it is not ‘get in and get out’. But it is a variable rate so it will move with the market, depending on what the Reserve Bank does with rates in the future. However, I don’t anticipate a major movement with the product itself.
“The reason is we want to look and see what sort of appetite the market has with our product – and then we will review it to assess whether we make it permanent or whether we pull the product. It is one of those watch-and-see products.”
The commission structure will be in line with the standard Teachers Mutual Bank structure of 60bps upfront and 20bps trail, exclusive of GST.