Mortgage of the Year

State Custodians outperformed itself this year to take out the big one in the 2012 honours: Your Mortgage’s Mortgage of the Year Award.

The SCMC Standard Variable Home Loan proved to be of such high quality, that not only did it take out three gold medals (including this one) and a silver all on its own, but it wrestled the title away from five time winner Ratebusters for the first time since 2009.

So, how did State Custodians do it?

First, let’s take a look at interest rates. The 2011-12 financial year has been riddled with unruly behaviour by lenders, who seem to have decided en masse to suddenly rebel against the recommendations of the Reserve Bank of Australia (RBA) and raise interest rates independently at every opportunity.

But, while some companies play follow the leader and up their rates, others take the opportunity to provide some great value and stand apart from their rivals. State Custodians has worked a bonus rate deal into several of its loan products that leaves competitors for dead.

The SCMC Standard variable Home Loan gets the ball rolling with a better than average rate. While this is good, its greatness is not revealed until five years later, when a loyalty reduction of 0.25% sees the rate automatically drop  assuming interest rates stay the same. A home loan is a lengthy financial commitment, so a rate discount that kicks in after five years means borrowers with a 30-year loan enjoy lower costs for nearly 85% of their repayment term. Not bad when you consider that the comparison rate on this State Custodians product before the bonus kicks in is approximately one full per cent lower than any of Australia’s Big Four banks.

Rates aside, the cornerstone of a solid standard variable loan is its range of flexible features. Here, State Custodians also strongly impresses.

The SCMC Standard Variable Home Loan offers an all in one account, with a 100% offset capability. It also allows unlimited additional mortgage repayments and unlimited free transactions every month. Borrowers can make as many redraws each year as they wish, at a minimum limit of $20 from an ATM or $100 via the internet.

Any loans taken out must be between $150,000 and $1m in value (exceptions can be made in certain circumstances), and range between one and 30 years. The minimum loan term of one year is generous, but State Custodians is undoubtedly confident that customers will stick around long enough to receive the loyalty bonus and then to enjoy it thereafter.

Borrowers have the option to make interest only or principal and interest repayments and have the option of up to four loan splits for free.

The maximum LVR is 95% with lenders mortgage insurance or 80% without, meaning the loan caters to most potential borrowers, who also have the option to fix interest rates for a $110 fee.

The State Custodians website provides details of all costs and features associated with the SCMC Standard Variable Home Loan, meaning no costly surprises down the line and top marks for transparency for the lender.

Finally, State Custodians provides superior levels of access to the loan, including via mail, ATM, cheque, phone/fax, EFTPOS, internet, over the counter, BPay and by credit card.

Well done State Custodians Mortgage Company for another great performance.