Online lender undercuts majors by up to 60bps

by Julia Corderoy23 Feb 2015
An online lender has slashed its fixed interest rate, undercutting the major banks by up to 60bps.

Loans.com.au – which does not deal through brokers – has dropped the interest rate on its one, two and three-year fixed rate home loan to 4.29%. 

“A lot of borrowers are keeping a close eye on the RBA for signs of another rate cut, but there are also many who are looking to fix their home loan interest rate for future certainty while rates are low,” says Kim Cannon, managing director of Firstmac, the company behind loans.com.au. 

“At 4.29% fixed for up to three years, they can enjoy the best of both worlds by choosing a mix of fixed and variable, and use a mortgage offset facility to cut their interest down even more.” 

The new rate undercuts all of the major banks, where one, two and three-year fixed rates range from 4.49% to 4.89%. 

In a recent poll conducted by Australian Broker, 43.5% of brokers believe online lenders could “potentially” pose a threat to the broking industry. Meanwhile, 41.9% said online lenders pose no threat to the broking industry and 14.5% believe they do pose a threat.
 

COMMENTS

  • by Coast Broker 23/02/2015 9:48:36 AM

    Cheap Interest Rate but no service especially after the loan has settled.

  • by Broker 23/02/2015 10:33:08 AM

    Suncorp and Me Bank ( both with similar service levels I might add) offering similar rates for 3 years, so no real threat here.

  • by Amazed 24/02/2015 10:54:00 AM

    Ubank are offering 4.18% for three years that's lower than the "cheapest"