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Jas S.
Jas S.
Revesby, NSW

Looking to borrow about $670,000 and a broker has quoted options of 1.3% off one of the banks standard rate and rate from a non bank called loanave. There doesn’t seem much difference between the loan but the rate is 0.26% lower - is it a safe decision to go with the non bank?

7 years ago


Jas. hi thanks for your question. As a mortgage broker myself, I have access to both Bank and non Bank Lenders. I do not believe thee is substantial risk in going with a non bank lender. Keep in mind you owe them money, not the other way around. I am not familiar with the Lender you mentioned however, if you are concerned, I would simply say keep all the money in the loan account and not run a separate offset facility that holds you 'savings'.
In advising my clients, I tend to suggest you ignore the level of discount offered. The important comparison is to use the Comparison Rate which will incorporate the discount plus any possibility that this may only be for an introductory period.
If you think worse case and a Lender went down, the first thing that would happen is they would on sell the loan and you may then find you are with a Lender that is not necessarily your own choice. if you are in order with your loan, they cannot call up and sell your house.
If you would like a second opinion on options available, I would be happy to take your call
Best Regards
Ken Olds
Customers First Mortgages & Insurance
1300 ASK KEN

Hi Jas,
Great question, I can imagine with all the different choices out there it would be a little hard to know whether you should just stick to the main players or take a chance on one of the smaller guys.

I guess one of the things that I would consider if it was me trying to make the choice I would not focus on the rate alone, whilst that is an attractive feature, I would look at the service proposition that they are offering. Will you be able to speak to the same loan writer/broker at any time when you have a question, no matter how small it might be.
Can you easily change the features of the loan, can it be moulded to suit you not moulding yourself to suit the loan?

Just some food for thought :-) Feel free to contact me offline if you would like to take the discussion further.

Best of luck with your decision :-)

Hi Jas,
As you are with a broker, I would expect that they have already tailored the loan to your banking needs and both have all of the features you need.
The only other consideration is the fees that may be charged establishing the loan, monthly or yearly fees and exit or alteration fees.
Your broker can give you a full costing of what you will pay with each year you stay in the product you choose and match that to your goals so that you have the most suitable package
Ask your broker a few more questions and then go with the most suitable lender regardless of their name or size
Best of luck

Hi Jas, further to the previous answers. You can ask your broker which lender is the 'funder' for the Loans Ave product. Many tanks are what we called in-house 'white label' products. This means that the brand is not usually the actually funder. Most of the products in the market are backed or owned my one or another of the major banks. A number of banks offer brokers with sufficient client bases, the option of a white label product to promote their own brand. It also can give the broker & client relationship more control over the service once the loan has settled.


We actually did a blog post covering this exact topic which you can read here


The risk of going with a small lender is largely over blown. One thing to consider is how often they move their rates out of sync with the RBA. Smaller lenders tend to be rebadging someone else's money so don't control (as much) their cost of funds, which can sometimes work in your favour (like now) but sometimes not (like during the GFC)

You can search for products across all 20 lenders we deal with at any time at unohomeloans.com.au

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