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I heard a radio ad promoting Australian biggest home loan sale with Rate City. Is this just marketing ploy for the banks or will they actually be able to help borrowers get people better rates.
The ad said the sale goes for 40 hours, does anyone know how it works?
Responses
Hi Tom, Sounds like the One Big Switch Campaign that was run a few years ago. Essentially the lenders offer a small incentive in order to entice people to register on the Rate City website. Then Rate City pass "sell" your details to the lenders who contact you to see if you actually qualify.
Rate is only one part of a home loan for example, can you make extra payments? Does the loan have an offset to help reduce the interest you are paying. Are you paying for accounts you don't need?
I know most people thing that every loan is the same but it is a bit like a loaf of bread, sure they look the same but the different between Coles home brand and a fresh loan of bread from a real bakery is miles apart.
Hi Tom,
As Albert has said, RateCity will be hosting a "Homeloan sale" with 8 lenders advertising their special offers. These rates are available through your broker all the time by targeted negotiation against your personal situation.
You will see some rates that are not on the lenders websites with good introductory discounts.
For example NAB have a reference rate of 4.88% and they then offer discounts through brokers according to the quality of the application based on Loan Amount, Loan to valuation ratio (LVR), quality of security and reliability of income with the best rates being around 3.90%.
What you will see is lenders offering 3.99% with a couple of asterisks about qualifying criteria.
If you would like to compare a large number of lenders, sit with your broker and match your needs to the most suitable product available then the rate will take care of itself.
Best of luck
Scott
Hi again Tom,
If you have an owner occupied mortgage under 80% LVR on principal and interest payments you should probably be paying under 4% and there have been no general rate rises in this product area.
Call a broker I think that it will save you plenty
Cheers
Scott
Hi Tom
Thanks for your question.
I'm the CEO of RateCity. For the 40 hour Switch & Save Sale, which is for people who already have a home loan, there are a number of lenders who will be offering specials, exclusive to the sale. Some will cut rates and some waiving fees. It also includes some lenders who's products are only available direct, and not through intermediaries.
During the 40 hours, consumers can register to see what products are available on sale. If interested they can then proceed through to further inquire with the lender.
I agree with the two experts above, in that rate is only one of the things that needs to be considered when deciding on a suitable product. That said, there are many consumers who could potentially save a significant amount of money if they were to refinance their home loan. The Switch & Save sale is to help consumers' awareness of this.
I hope this helps.
Best regards
Paul
Hi Paul
I certainly didn't expect to get an answer from the CEO so thank you for letting me know how the sale works. I will register my interest and see what happens
Regards
Tom
Tom, Good morning. In short this is a bit of a gimmick. The eight Lenders taking part are Community First, HSBC, IMB, ING DIRECT, Mortgage House, Reduce Home Loans, State Custodians, and loans.com.au.
People interested in the offer are told that they must self check the Lenders policies to determine if they qualify. A Credit Check will be performed once you register your interest and should you not be eligible, or simply find the products to be unsuitable, this will be a negative impact on your credit report.
There is a strong argument that this campaign is being performed in contradiction to the requirements of the National Consumer Credit Protection Act (NCCP). Under this Act a Credit Representative / Licensee is required to conduct a Needs Analysis and ensure that the product being recommended is not unsuitable, however here we have Rate City pushing through applications and performing credit checks without the proper preliminary work being performed, all under the disguise of what is described to be the "lowest ongoing variable rate". Given this cannot be guaranteed this terminology would also be a breach of the NCCP.
If ASIC were on the ball this campaign would be closed down before it commences.
If you would like a proper health check on your existing loan with recommendations that suit your personal needs then please give me a call. I will be happy to visit (over 30 Lenders available).
Best Regards
Ken Olds
Customers First Mortgages & Insurance
www.AskKen.com.au
1300 ASK KEN (275 536)
Hi Ken
Just to correct some of your statements, RateCity are not pushing through applications, and not performing credit checks. RateCity is not recommending or selling any products.
In this promotion, we have simply brought together a number of lenders who are putting special offers to consumers, for a limited period of time.
RateCity is promoting the sale, but we are not the sellers. An analogy might be Westfiled promoting a "boxing day sale", but they are not the retailer who is selling the products.
I hope this helps.
Best Regards
Paul
Thanks for all the feedback and I am keen to understand more. I have just received an annoying letter from my bank stating my interest rate is going up so it might be good to see what other options are available especially as I have not heard of some of the lenders mentioned.
Regards
Tom
Hi Tom H,
This is a great initiative by Ratecity to get a bit of consumer awareness back in the media and to have a "movement" to get some better rates for us all being pushed around rate wise by the banks.
This being said, there is process and these best rates are typically provided on a risk basis. ie.The lower the risk the cheaper the rate.
So if your loan is low compared to the value of your home and your family income net of expenses easily repays the principle and interest off your home ...and more, you are the type of person who may be eligible.
Any Broker should have access to comparable deals to Ratecity. Reach out to the professionals and not the lenders direct, best to get the full knowledge before proceeding with any application.
Sometimes a call to your existing bank noting the above will make them happy to reduce your interest and avoid the headache of move.
Happy to chat.
Go the Tigers
Chris
Thanks Albert
I know the rate is only one part but it is annoying when my bank has just increased my interest rate.
Regards
Tom
Hi Tom, Why not submit an enquiry on Hashching and let one of the brokers see what they can do for you. It is a free service. That way you will know if the Rate City offer is actually competitive. Also sometimes a broker can negotiate with your current lender to lower your rate.