These rates too good to be true?

I was just browsing infochoice and i came across this lender:

http://www.onedirect.com.au/

Std variable: 6.71%
1 year fixed: 6.73%
loc: 6.89%

All loans with no fees

Has anyone heard of this? It sounds too good to be true given the current rates, theres gotta be a catch somewhere. They claim on the website its low because they cut their costs by reducing branches...
 
Could be right. A quick look at Cannex shows a couple of <7% even for investment properties (though they tend to be the credit unions). Lowest owner occupier basic variable rate is the 6.21% from Wizard (don't think that's a honeymoon rate, though that's for owner occupiers only and has almost no features) and a 6.20% from AMO (whatever that is). One direct has one of the better rates for investment propety.

No-one pays the standard variable anyway. The ANZ money saver (before discounts) is only 7.22%.

Have a look at this:
http://intranets.cannex.com.au/surveys/mortgage.htm

If it doesn't work just go to the cannex website and find the home loan table.
Alex
 
I guess I haven't been researching enough the best i thought i could get was 0.8% off the standard var (which is 7.82% atm).
 
I'm not sure if there are any issues with using those smaller non-bank finance providers. Though Wizard is now owned by GE Capital, so it's hardly small.

There might be more fees and so on, and early repayment penalties (the Wizard one, at least, does), and forget about offset accounts, etc. Not a bad idea for someone who just wants to buy their PPOR at the lowest rate possible, though.

Mortgage brokers, any comments / opinions on using the big banks vs non-bank providers?
Alex
 
i looked into the wizard one its got no features and its a long term p & i loan hence the cheap rate.

i'll prob use it when i'm buying my firsts PPOR
 
http://www.onedirect.com.au/about.asp
one direct is owned by Australia and New Zealand Banking Group Limited (ANZ), one of Australia's largest and most respected retail banks. To find out more about ANZ, and the reason why more that 6 million customers have chosen ANZ, visit the ANZ website.

one direct was launched in July 2006 in response to the increasing demand for more accessible home loan services via direct channels – phone and online.
 
Hi Sonic,
Onedirect is ANZ's new subsidiary company for internet only marketing of mortgages. I have spoken to sales consultant and those rates will be held until January 2007, whereupon they will then pass on the current 0.25% rate rise to variable loans and any other rises that occur. They will then have almost identical rates with HomePath (CBA owned subsidiary company maketing via internet only). No brokers are engaged by both companies.

The web site launched in July, and they appear to be holding back on the rate rise in August to help establish themselves in the market place. I don't think there are any hidden catches to their product. It will be interesting to see how successful they become.
 
analysing cannex data

I'm new to the forums, by the way -hope to contribute a little!
from the cannex table...

I copied, pasted, then sorted...


//Cheapest investment standard variable rates

Police CU SA 6.59
Nationwide Capital 6.67
One direct 6.71
Rate Busters 6.77

//Cheapest line of credit

Rate busters 6.77
One direct 6.89
Assured Home Loans 6.92
Refund Mortgage 6.95

//comment
Ratebusters seems to be more established and has a very cheap LOC rate... would you recommend it over onedirect?

A) On the table, there is a line of credit list. I'm fairly new, but LOC and an offset account are the same thing yes?

B) If I have IP#1 with another lender (bankwest) and want to use a LOC for a new IP#2 with ratebusters, can I access equity in IP#1?
 
no.. i think LOC and offset are different.

A line of credit is sort of like, i guess for lack of a better description, sort of a big credit card. A whole wack of cash you canu se and repay and stuff.

An offset account is an account linked to your loan, and you can put money in there, and its classed as being "paid onto" the loan, and so is offsetting the interest. yuo can then pull that money out again, no fees, no difficulties, and its not a redraw.

(ie, you get 500$ put into the offset, it's as if you made a 500$ payment on your loan, and interest is calculated on that premise.)

i think i'm right.. someone else may be able to explain it better
 
Hiya

I doubt that it will be properly resourced...............just look at Homepath.

Its a struggle to get things done.

ANZ will lose market share to itself ,............ its cannibalisation :)

ta

rolf
 
Rolf Latham said:
Hiya

I doubt that it will be properly resourced...............just look at Homepath.

Its a struggle to get things done.

rolf

Could you elaborate on your experiences?
 
//Cheapest line of credit

Rate busters 6.77
One direct 6.89
Assured Home Loans 6.92
Refund Mortgage 6.95
I dont see any LOC loans for rate busters. Only a "LoDoc" (Low Documentation) product. Link?
 
Hiya

Many :O) just do a search on the name here and you will get some interesting (to be fair, some good too) comments.

The current one is I have a good friend who is very rate concious, the 6.99 fixed for 5 is quite smart.

Applied to said lender over 14 days ago, and only had the val ordered the other day. Essentially he was told that a 3 to 4 weeks for approval isnt uncommon. Too much work, not enough staff.

The challenge for him is that in NSW the cooling off is 5 days, and if you have a narky vendor you are stuffed. Finally, no fixed rate lock in, so while we are chasing hard to get this done, the rate may still move under him. because the underlying lenders 5 year fixed pro pack is now at 7.34.

Very often people come to me and ask me whats your best rate...........I simply quote them the web site. Usually they are back on the phone within 10 minutes.............but but, no one will come and see me or give me structuring advice .........this product and service mix is likely OK for a ma an pa home loan but has major possible impacts for an investor.

An old Maxim states.......there are 3 things to any good or service

Price, quality and service

Choose any two.

ta
rolf
 
coincidentally after reading this thread, my broker rang and did a follow up (asked for a loan last month to buy a place to live) ... and i told him about onedirect... without much negotiation, he gave me .7 off the variable rate... so about 6.87% to 6.97%! i'm with anz... breakfree package.

i guess if there's too much hustle with onedirect, may as well stick with the original lender. just use inedirect as a bargaining tool ;)

wat do u guys think?
 
kero said:
coincidentally after reading this thread, my broker rang and did a follow up (asked for a loan last month to buy a place to live) ... and i told him about onedirect... without much negotiation, he gave me .7 off the variable rate... so about 6.87% to 6.97%! i'm with anz... breakfree package.

i guess if there's too much hustle with onedirect, may as well stick with the original lender. just use inedirect as a bargaining tool ;)

wat do u guys think?

standard variable is currently 7.82% i thought (could be wrong) so 0.7% off will be 7.12%? you might want to double check...
 
Rolf Latham said:
Hiya

An old Maxim states.......there are 3 things to any good or service

Price, quality and service

Choose any two.

ta
rolf


i completely agree nothing's for free most times, i think the service in these loans will be crap. having said that i'll think these loans are really attractive to forumites who have at least a basic understanding of finance.

the only risk these loans run is that the financing takes forever. for most investors this not a problem may the purchase price with cash drawn from a LOC of and take the time applying.

domain as a good article on these new loans: http://www.domain.com.au/Public/Article.aspx?id=1155407803329&index=NationalIndex

i'm intersested to see how these new loans will effect broker business, its in effect competition to them. however initially i think it will have minimal impact the market share will be tiny, after a few rate rises with borrowers being cost concious it might be interesting :)
 
To be fair, I'll probably still continue to use my mortgage broker. The interest rate is of course important, but having a mortgage broker who is switched on and follows up stuff for me is priceless.

There will come a time when I need fast, intelligent finance solutions, and I'd rather keep a good mortgage broker on side. You pay for what you get.

If it's just someone who wants to buy their PPOR and that's it, I'd tell them to use the cheap financiers. They don't need the frills.
Alex
 
sonic said:
standard variable is currently 7.82% i thought (could be wrong) so 0.7% off will be 7.12%? you might want to double check...

thanks for that... just emailed the broker... will let you know the outcome.
 
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