Best Loan for Refinancers Mortgage
The Ratebusters Ultimate loan has been awarded the gold medal in the 2012 Best Loan for Refinancers category, edging out joint silver medal winners Loans.com.au and State Custodians Mortgage Company.
The scenario that was used to judge this award was that of a home owning couple with a relatively high combined income and a sizeable available deposit ready to go, thanks to the equity from their first home.
We assumed that our mortgage shoppers had an available deposit of $100,000, including equity, and that they were looking to borrow $300,000 to purchase a $400,000 property. They were seeking a 20-year mortgage term, during which they would make monthly repayments.
Naming a loan product ‘Ultimate’ conveys a high level of expectation and Ratebusters delivers from the word go.
An advertised interest rate is matched by a comparison rate, largely due to an absence of application and ongoing fees. An added bonus kicks in after five years when borrowers are entitled to a 0.1% loyalty rate reduction. While 0.1% does not sound like a huge difference, it adds up to more than $4,000 saved over the loan term, which could be better spent elsewhere.
The Ratebusters Ultimate loan also offers unlimited additional repayments at no extra cost, as well as an uncapped number of free redraws each year. Other features include 100% offset, interest only repayments for up to five years and four free loan splits, as long as the option is taken during application.
The maximum LVR is 90% with lenders mortgage insurance, or 80% without, but our refinancers’ healthy deposit sees them immune from LMI regardless. Loan terms range between eight and 30 years, meaning any further planned refinances would have to be put on hold for a while, but the loyalty discount sweetens the deal significantly.
Loans.com.au picked up the silver medal in this category for its Dream Loan product, which shares many of Ratebusters’ great features. A 6.5% headline interest rate (6.45% comparison), rolls over into a 6.4% rate after five years is up. While not as low as Ratebusters, it is still a tantalising prospect.
The Dream Loan also features no application or ongoing fees, a rock bottom total start-up cost of $75, a 100% offset account, unlimited additional repayments and redraws at no extra cost and free portability and combination loan features. Loans.com.au also offers a flexible loan term of one to 30 years, displaying confidence in the lasting appeal of the product.
State Custodians Mortgage Company tied for silver with its very successful Standard Variable Home Loan.
This product features a low interest rate of 6.37% (6.48% comparison), which rolls over to 6.12% after five years, thanks to a massive 0.25% loyalty discount.
Other good features include 100% offset, unlimited additional repayments and unlimited free redraws per year, provided they are higher than $20.