Our job here at Mortgage Advice is to source our clients the most effective home loan for their requirements. However a question asked with reasonable frequency is who is that Lender? I have never heard of them, can I trust them? In Firstmac’s case, I personally had my mortgage with them and can attest to how the rates are low, the offset and loan accounts are fully transactional. Unknown to most they also secured backing from the federal govt post GFC like the big banks did. But unlike some of the worlds biggest financial institutions (HSBC, GE) they stayed in the Australian market post GFC with good rates and product. In fact they even took over HSBC’s mortgage lending book in Australia.
Now right or wrongly Firstmac sponsor the Brisbane Bronco’s, which has helped their visibility in SEQ a little. But I still get the same worries about these smaller lenders. Yet I also hear people complaining about how the bigger banks are making huge amounts of profit and have “average” customer service.
Unfortunately we can’t have it both ways, competition leads to better rates across the board. However if all you want is the perceived security of a big 4 lender then be prepared to pay a little more in interest rate and fees.
Now that banking is online or via the ATM does branch access really matter? when was the last time you went into the actual bank. I have heard bank staff justify the interest rates on their mortgages as they have branches.
So what happens when a lender fails? in HSBC’s case Firstmac bought the mortgages and continued to service them, while honouring the terms and conditions of the mortgages. No one lost their home or mortgage directly from this. It just comes down to one very large business deal. Colonial bank was bought by CBA, St George by Westpac etc etc etc the list goes on where banks are bought by other banks and its business as usual.
So if you truly want to see competitive rates across the board perhaps have a look at the smaller players. Right now ME Bank has lower fixed rates than the majors while Firstmac and Gateway Credit Union are very competitive on the variable rates.