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Non-bank offers rates under 3% with new product

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Australian Broker | 29 Sep 2015, 08:07 AM Agree 0
A non-bank lender has unveiled a new discount home loan product which will offer owner-occupied rates under 3%
  • Mortgage Guru | 29 Sep 2015, 09:16 AM Agree 0
    What's the REAL rate i.e. comparison rate? What are the establishment and ongoing fees?
  • Rich | 29 Sep 2015, 09:22 AM Agree 0
    This is called a con job special. Lenders should be forced to publish the weighted average rate which accurately informs the borrower what they are actually paying for all loans.
  • barney | 29 Sep 2015, 09:39 AM Agree 0
    What happens when the ATO wake up to this? It reminds me of the old structure where lenders allowed investors to capitalise interest on investment loans while paying off deductible loans. Ultimately the ATO don't like it when you manipulate their slice of the pie. Then comes the back interest and penalties...
  • Kym | 29 Sep 2015, 10:25 AM Agree 0
    Here we go again - I thought APRA would have jumped on this from day one.
  • John Sanders | 29 Sep 2015, 11:23 AM Agree 0
    More confusion for the consumer!

    All this does is add extra work for brokers who have to explain why they cannot get 2.99% for their clients. It is nothing more than false advertising.

    I could come up with a rate of 2.99% and then have a whole heap of conditions. Come on APRA do your job!
  • SEQ Broker | 29 Sep 2015, 12:46 PM Agree 0
    Mortgage Managers have been doing this for ages on Cross Collateralised loans. It's a great way to legally load the investment with consumer/PPR debt.
  • Joe Broker | 29 Sep 2015, 02:41 PM Agree 0
    This is not innovative, and it's not "really going to rock brokers’ socks off”, at least not the ones that know that all that glitters isn't gold.
  • John Online | 29 Sep 2015, 03:13 PM Agree 0
    WOW great product, whats with all the negative comments, must be major bank brokers.
  • Mark | 29 Sep 2015, 03:54 PM Agree 0
    There is a tax department ruling on this so all seems kosher to me, I think it's a good idea.
  • Russell | 29 Sep 2015, 04:10 PM Agree 0
    Wow this has got to be a record low rate. Nothing compares to this in the market. Investment rates are increasing and in line with this anyway so the saving on the owner occ loan is massive.
  • Annabelle | 29 Sep 2015, 04:23 PM Agree 0
    I'm all for bigger discounts... Let the good loans roll.
  • Sydney Broker | 29 Sep 2015, 04:42 PM Agree 0
    There was an ATO ruling some months back but the article has no reference to it. Correct me if I'm wrong but if I write loans through this mortgage manager, are my clients not protected? If that's the case why would any broker expose their clients? Seems like a copycat of the real deal.
  • James | 29 Sep 2015, 05:29 PM Agree 0
    These guys are awesome. Thank goodness for a shining light in the midst of so much doom and gloom. My only issue is how will serviceability be calculated at actual rates payable or loaded, as that's the elephant in the room right now as far as lending is concerned. If APRA has its way no one will be able to finance an investment property soon...
  • lee | 29 Sep 2015, 05:31 PM Agree 0
    What a fabulous product, at last something that's win win for the client. Pay there home off quicker and receive better tax advantages, obviously any broker making a bad comment does not have access to the product. Go on majors increase your rates again for existing investment clients.
  • clint | 29 Sep 2015, 05:32 PM Agree 0
    Sounds like a good idea. I have the read the comments and I think you all miss what it is the clients can get. The clients get the lowest rates on the their owner occupied and a higher rate on their investment but when you do the figures, it all equals out to be a very good offering. If you can understand it, sell it, if you can't then maybe you are in the wrong industry!

    Send me more details please!
  • Jane | 29 Sep 2015, 08:57 PM Agree 0
    I wonder is this a record low rate! How can interest rates go this low?
  • Bronco Kym | 30 Sep 2015, 05:52 AM Agree 0
    What a great way for non-banks to fight back against the big 4, they have been discounting for years when brokers give multiple loans. The negative comments show a lack of understanding of the market.
  • Papery | 30 Sep 2015, 09:54 AM Agree 0
    I am also skeptical. Client is well & truly locked up with Mortgage Manager & most likely subject to LMI provisions also (irrespective of who pays the premium).

    How long will such low rates stay on offer & how long before the clients interest rates slowly creep up... We all know that lenders move their rates outside of the RBA & most of the time the client will only notice on a loan statement that comes out every 6 months. How is the Mortgage Manager making their margin on all this... Full transparency please.
  • Joanne | 30 Sep 2015, 10:55 AM Agree 0
    I believe their is a product ruling on these sorts of loans. They have been around for well over a decade with the mortgage manager Astral, prominent in promoting them, but a new version has re-emerged recently to conform with the Taxation Departments concerns primarily that interest cannot be capitalised and added to the investment debt.

    I think it's great to give my customers choices like this and I definitely will be enquiring more about the Mortgage Ezy offering as it seems as good as I've seen so far.

    However, every client is different and it's important to note that this sort of product will only suit some of them. Each client should seek their own advice. Some of the comments below seem to be placing this onus on the lender. Clearly it is our responsibility to make sure clients are properly informed.
  • Andre Szarukan | 30 Sep 2015, 10:59 AM Agree 0
    Great to see positive innovation and "disruption" in the market. Well done Peter!
  • Phil in Finance | 30 Sep 2015, 02:19 PM Agree 0
    What will be very interesting is which "standard variable rate" they use from each major bank to arrive at their "average" investment loan rate. It certainly won't be any of the current discounted rates that are on offer from the banks.

    I would also expect there is a minimum investment loan size and % of total debt to ensure the weighted average rate is still where the funder wants it to be.

    As others have said, the devil will be in the details/fine print.
  • Patrick | 30 Sep 2015, 03:31 PM Agree 0
    Anyone providing innovation in Lending has my vote. For too long we've been complacent as banks attempt to wind back the clock. Who would have believed 10 years ago, lo docs gone. Investors penalised with higher rates and tough criteria to name a few. At least they are having a go driving rates down and paying reasonable commissions. Keep it coming guys!
  • Rich | 30 Sep 2015, 03:38 PM Agree 0
    This is not innovation, this is a con. You can drop the home loan rate as low as you like and then promise an "average of the big banks" investor rate, but its only valid today. Once rates change you will see the investor rates sky-rocket and the weighted average rate will be significantly higher overall. It's a look over here but don't watch my other hand steal your wallet trick.
  • Marianne | 30 Sep 2015, 03:48 PM Agree 0
    Fan-bloody-tastic! LOL seems to have alot of trolls from the banks crying about a product that blows them out of the water! Pleased to see Mortgage Ezy making a come back! This is the best offering I have seen in my lifetime.
  • Zac | 30 Sep 2015, 06:49 PM Agree 0
    Peter James, can you state with certainty that the ATO ruling secures our clients appropriate protection? I just read PR2015/2 (google it) which states that this ruling is applied if licenced by Loan Reducer PL who owns the ruling; I just want to make sure before I offer my clients this innovative product. If that's the case, then my brokers and I are in.
  • Michael | 01 Oct 2015, 07:20 AM Agree 0
    I started dealing with these guys last year when they launched some great rates enabling we to offer something unique. I like the fact that I can be different to the bank as I have lost deals before to the local branch when I've recommended bank product. I just hope their service proposition doesn't drop as we saw with Suncorp and others who have brought out great deals from time to time. Its so important to manage the workflow.
  • David | 01 Oct 2015, 10:24 AM Agree 0
    I think with anything like this clients must seek their own advice. Looking at some of the comments displaying varying degrees of ignorance and lack of knowledge just highlights this. Clearly only a few brokers with an accountancy or financial planning background are equipped to deal with these issues with certainty.
  • Dave Robinson | 01 Oct 2015, 01:38 PM Agree 0
    "Clearly only a few brokers with an accountancy or financial planning background are equipped to deal with these issues with certainty."

    Really David? Would you by chance be a FP or Bean Counter?
  • Bill | 01 Oct 2015, 03:34 PM Agree 0
    Well done guys!

    Keep it coming...
  • Paul | 01 Oct 2015, 07:28 PM Agree 0
    Thank goodness for some genuine alternatives to the banks. Funny how the very guys that tell hard done by stories of cross-channel conflict and banks taking commissions and trail line up to give the majors their business week after week. It is these guys I suspect jump to conclusions or bag new offerings like this without understanding how they benefit the consumer. I for one take my role seriously and continue to offer the best I can to suit individual needs. I hope this is the first of many non-banks making a comeback. We need to have real choice...
  • Chris | 02 Oct 2015, 12:32 PM Agree 0
    I will definitely be looking into this. I've been hearing good things about these guys.
  • Phil | 02 Oct 2015, 12:49 PM Agree 0
    Is this copying Loan Ave? Loan Ave already has this in the market so I don't think Mortgage Ezy is being innovative here and as far as I know the ATO product ruling doesn't extend to Mortgage Ezy distributing this product so it appears to be a copy of another lender which is very very disappointing and unprofessional, unless proven wrong.
  • Edward | 03 Oct 2015, 11:46 AM Agree 0
    I think it's great as long as their serviceability calculator doesn't cherry pick. Day by day it's getting increasingly harder to set an investment loan. While I understand the need to cool non-residents buying, why penalise average Australians? I'm glad to see Mortgage Ezy supporting average Aussies trying to secure their future.
  • George | 07 Oct 2015, 07:17 AM Agree 0
    From what I can see the product ruling I saw does not apply to Loan Avenue or any other bank or non-bank. It applies to Loan Reducer and expires yearly. I have seen this product offered by Prime and Mortgage Ezy and recently Loan Avenue. It has not been designed by any of the three mentioned groups and according to my research, none (incl Reducer) completely comply with the ruling. So I totally agree with comments that clients should seek their own advice as everyone's situation is different.
  • Sydney Sam | 07 Oct 2015, 07:50 AM Agree 0
    Thanks for the update, however you have left out any information regarding the ruling? I guess what us brokers will need to know to comfortably sell this product is if the ATO ruling applies. If it does, the product will fly and if it doesn't its the brokers taking the risk. Thank you.
  • Ian | 09 Oct 2015, 10:21 AM Agree 0
    What a breath of fresh air. Its great to see people thing outside the box. Well done!
  • Aggregator Angry | 10 Oct 2015, 09:02 AM Agree 0
    I can see why some people below have had knee jerk reactions to this great release. I have clients this would really suit but I cannot access Mortgage Ezy on their panel anymore. It's a case of vertical integration gone wrong. With mortgage managers like Ezy posing a threat to their strategy of selling their own products we pay the price and ultimately our clients suffer... That's what APRA needs to get on with.
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