Warning Beware Of Myrate.com.au

[maloriopolium]

Hey guys,

I just thought I'd like to warn people about MyRate and how they are charging new and existing borrowers completely different interest rates on the same Loan Type.

You can have a read of some very disgruntled borrowers who have already fallen for the trap:
http://forums.whirlpool.net.au/forum-replies.cfm?t=1404740

From the above, it looks like you could be slugged with a rate increase just a couple of months into your loan, meanwhile the advertised rate is still the same to lure in new customers!

 

[Token Funder]

Hey guys,

I just thought I'd like to warn people about MyRate and how they are charging new and existing borrowers completely different interest rates on the same Loan Type.

You can have a read of some very disgruntled borrowers who have already fallen for the trap:
http://forums.whirlpool.net.au/forum-replies.cfm?t=1404740

From the above, it looks like you could be slugged with a rate increase just a couple of months into your loan, meanwhile the advertised rate is still the same to lure in new customers!

Reading the thread, it appears people are pissed that their rates are higher than the new business rates advertised on the site.

Kind of like getting a loan from CBA with a given discount to SVR and paying a full application fee and then seeing bigger discounts and no fee advertised 6 months later.

Not sure they've worked out it happens all the time.

 

[Peter_Tersteeg]

The difference is that when the CBA advertises their SVR, you know that what they're advertising is the worst case scenario.

MyRate are pricing groups of customers within the same product and only advertising the lowest rate, not the highest.

 

[kmtopgun]

MyRate is a fantastic and fair Home Loan Provider

Hi maloriopolium,

You are obviously very nieve to how banks and lending institutions work and how they charge interest rates. To make a heading warning people about MyRate is uncalled for and is an ingnoramouses view of a brillient lender that consistantly beats most of the main stream home loan lenders in Australia. Firstly, to understand how money is sold you must realise not just MyRate but every lender in Australia buys money at a certain price then on sells this money to the consumer as a home loan at different rates at any particular loan.

As an example, if today the home loan market has a price war, the lender may decide to discount their normal profit margin in order to attract business so today for example, the lender may sell their home loan for example 6.95% and also as an example, the lender may only make 0.1% profit on this loan for the life of the loan. On the converse, if yesterday the lender has an over demand of business, they may decide to put a slightly higher margin on their loan say 0.2% so as to maybe reduce the number of loan they write which means that yesterday you may have taken a loan at 7.05% whereas today your loan is only 6.95%.

This means for the life of the 7.05% loan, the lender will make 0.2% whereas for the life of the 6.95% loan, the lender will only make 0.1%. This is where the lender decides what rate they will sell a loan at and the consumer will only accept that loan be it 6.95% or 7.05% only if either of those rates are lower than the opposition rates at the time the consumer does their comparisons.

So the upshot is almost every single client with any lender on Australian soil will and can have different interest rates. This is not to say the lender is ripping you off, it simply means the lender is willing to make less profit in the lean times which is of benefit to the consumer. The lender cannot simply increase the margin they have charged when the loan was originally taken out, that margin of profit remains constant for the life of a loan be it 5, 15, 20 or a 30 year loan.

Before making false accusations about a lender, check out every other person that has loans with any of the main stream lenders and you will find that very few of their clients are on the lenders advertised discount rates, most of the borrowers are on interest rates of up to 1% above what the big four are presently offering new clients.

Maybe you should ask why do almost all of the banks advertise a particular standard rate on their website then offer promotional discounts. Why don't these main stream lenders stop playing games and just quote the rate they are willing to give if you are a borrower that is astute enough to haggle but if you are not, then you will be charged their standard rate....this is what I call unfair and deceiving.

MyRate never offer discount or promotional rates, MyRate always advertise the best rate they will give you as a home loan so the brilliant thing about MyRate is that they are completely transparent. What you see is what you get, they do not play around with interest rates and they certainly do not play around with your financial life.

Anyone considering getting a home loan, please do not take thisposters words as your deciding factor. Do your own research to see which lender provides not only the best interest rate but also Comparison Interest Rate, compare the features they offer and then once you find a lender that ticks all your boxes, go with them. In doing your research you will find far more positive feedback on the website re MyRate than the one or 2 ill informed bloggers......and who is to say this blogger does not work for one of the main stream lenders that simply sees MyRate's brilliant products and competitive rate as a threat to their business????

NB: DO YOUR OWN RESEARCH and get the right information, not misleading information.

 

[Rolf Latham]

MyRate's brilliant product

Hi and Welcome


Brilliant Products How so ?

What is the difference to the other "me too" lenders

ta

rolf

 

[mech81]

kmtopgun,

A rather nasty reply and not really answering the question..more like sidestepping it. Do you happen to be working for Myrate by any chance.

The whirlpool thread posted that what myrate was doing is similar to a "honeymoon rate" system. Though not illegal (other than implied), a lender is entitled to raise their interest rate at their own willy-nilly.

However, it betrays the customer's trust when they find out a year down the road that their interest rate has been raised multiple times while the RBA cash rate has remained steady. Yes, myrate advertises their best rate..what happens after when the customer is locked in (thankfully no longer with the ban on exit fees)?

kmtopgun, now that u have advertised yourself as the myrate advocate...please answer why is myrate home loan interest rate being raised every few months for existing customers when the RBA cash rate remains steady? I have an inkling to the forecoming answer but I'll you have a chance to explain yourself. Luckily we have forums like this and whirlpool to spread the news on what happens with certain grps of lenders to give us a heads-up

Dennis

 

[Peter_Tersteeg]

This sounds a lot like Natalie's responses to the original thread on Whirlpool.

MyRate always advertise the best rate they will give you as a home loan so the brilliant thing about MyRate is that they are completely transparent. What you see is what you get, they do not play around with interest rates and they certainly do not play around with your financial life.

The problem here is that MyRate are promoting the 'best rate they will give you', but this isn't necessarily the actual rate you'll end up with. As explained on Whirlpool, MyRate funds borrowers through batches. Initially the pricing of a batch of money is at the advertised rate, but as the costs of funding that batch change, the interest rate paid by borrowers in that batch also changes, even when the lender is still advertising a completely different rate.

Hence many people on Whirlpool are complaining that they're paying a different interest rate to what's published for the same product.

With the first and most second tier lenders is that the cost of funding for different batches of money is averaged out and used to price the 'standard variable rate' which is the benchmark against which everyone's loan is measured. If you negotiate a bigger discount than the next borrower that's good for you, but at least the benchmark against which you're all being discounted is published and open.

MyRate simply aren't as transparent as kmtopgun states, as most people have an expectation that if the lender is advertising a particular interest rate for a product, they don't expect to pay more than what's published.

 

[kmtopgun]

Lenders increasing rates every other month

No, I am not an employee for MyRate. I have been a broker since 1999 and have submitted loans to multiple lenders.

What grits me is that bloggers make comments that are absolutely false.

No lender and I reiterate, no lender including MyRate simply increase the borrowers rates every other month. That is just a plain stupid comment and if it were the case that lender would certainly not be in business today.

Unless you are not aware, there is strict regulators within the finance industry such as ASIC, Credit Ombudsman and MFAA. The type of practice you describe whre rates are changed every other month could and would never happen or be tolerated, not only by the regulatory bodies nor by the consumer.

The only time a loan interest rate is increased or decreased is generally when the RBA announces an interest rate change and this generally only immediately impacts a variable rate loan.

Yes, lenders have increased interest rates over or below what RBA announces but certainly almost never at a random time during the term of a contractual loan.

I am simply responding to your comments being aimed at 1 loan provider when every single lender applies the exact same money buying and money selling technique. It is my experience in the mortgage industry that allows me to compare MyRate and come to their defense because in all my years as a broker, although as a broker I am unable to directly submit a loan to MyRate via my brokerage business, MyRate have certainly demonstrated the most consistantly lowest interest rates on the market in the past few years which has been bad for my business as a broker. I have over the years lost hundreds of loans to them.

Upshot is get your facts right, understand how loans work and simply do your research to find the best loan for you. Stop slagging any lender falsely.

 

[kmtopgun]

Rates incresing whn RBA is stable

Sorry, forgot to reply to your comment here.

Again another illinformed and totally inaccurate blogger.

In case you have not noticed. On Melbourn Cup Day RBA announced a rate rise of 0.25%. Within 2 months thereof, almost all lenders in Australia increased the interet rates to all their existing client anywhere from 0.25% to 0.45% with the major banks applying the higher rates.

Since then, have you not noticed that there has been a mortgage price war on in Australia and almost every lender without exception has actually reduced their rate to attract new business. When any lender reduces thei9r rate to attract new clients, none of their existing client get the benefit of any reduced rate or intro rate or promotion rate unless the clien closes down their existing loan and takes out a new loan with their lender at the discounted rate.

So to reiterate, neither MyRate or any other lender has been increasding rates, they have actually been decreasing rates in order to grab some mortgage business.

 

[Marty McDonald]

Perhaps they are just not as good at playing the price shifting game as some others. One lender in particular comes to mind where they have for the last 10 years or so offered a good product for a few years then let it creep up in rate to be replaced by the newest super duper product. Hey come to think of it quite a few lenders do this. At least the majors have a benchmark rate that everyone knows is the maximum payable..

 

[sash]

Who cares about funding....the post is appropriate....I too don't trust some of these smaller lenders.

As for banks....they are not much better. I think blogs are great!

This means for the life of the 7.05% loan, the lender will make 0.2% whereas for the life of the 6.95% loan, the lender will only make 0.1%. This is where the lender decides what rate they will sell a loan at and the consumer will only accept that loan be it 6.95% or 7.05% only if either of those rates are lower than the opposition rates at the time the consumer does their comparisons.

So the upshot is almost every single client with any lender on Australian soil will and can have different interest rates. This is not to say the lender is ripping you off, it simply means the lender is willing to make less profit in the lean times which is of benefit to the consumer. The lender cannot simply increase the margin they have charged when the loan was originally taken out, that margin of profit remains constant for the life of a loan be it 5, 15, 20 or a 30 year loan.

Before making false accusations about a lender, check out every other person that has loans with any of the main stream lenders and you will find that very few of their clients are on the lenders advertised discount rates, most of the borrowers are on interest rates of up to 1% above what the big four are presently offering new clients.

Maybe you should ask why do almost all of the banks advertise a particular standard rate on their website then offer promotional discounts. Why don't these main stream lenders stop playing games and just quote the rate they are willing to give if you are a borrower that is astute enough to haggle but if you are not, then you will be charged their standard rate....this is what I call unfair and deceiving.

MyRate never offer discount or promotional rates, MyRate always advertise the best rate they will give you as a home loan so the brilliant thing about MyRate is that they are completely transparent. What you see is what you get, they do not play around with interest rates and they certainly do not play around with your financial life.

Anyone considering getting a home loan, please do not take thisposters words as your deciding factor. Do your own research to see which lender provides not only the best interest rate but also Comparison Interest Rate, compare the features they offer and then once you find a lender that ticks all your boxes, go with them. In doing your research you will find far more positive feedback on the website re MyRate than the one or 2 ill informed bloggers......and who is to say this blogger does not work for one of the main stream lenders that simply sees MyRate's brilliant products and competitive rate as a threat to their business????

NB: DO YOUR OWN RESEARCH and get the right information, not misleading information.

 

[mech81]

So to reiterate, neither MyRate or any other lender has been increasding rates, they have actually been decreasing rates in order to grab some mortgage business.

Then maybe you should post in whirlpool as well and see what the ppl who have been locked in for 5 years say. From my understanding, their interest rates with myrate have gone up despite the RBA rates being steady.

 

[Kanemicm]

Myrate.com.au has been, coping it left, right and centre on forums.

Must have done something wrong.

 

[Seeto]

Myrate Pty Ltd

Well, kmtopgun, as you do in fact get paid to represent Myrate (I wonder how much), I am not surprised you are supporting their somewhat dubious lending practices. (Mortgage One by any chance)?

First, lets clear a few things up. Nobody is saying that they are raising rates every other month, that is not true. What is true though, is that a huge percentage of their existing customers are paying more than their advertised rate for new business. Many of these have been subjected to rate rises by one means or other very shortly, read a few months, after being locked in with high penalty exit fees.

If what you say is true, then what is the point of a comparison rate? It effectively becomes absolutely useless in comparing loans of similar rate and duration if the interest rate can change in the manner that you describe.

Also, your assertion that "every single client with any lender on Australian soil will and can have different interest rates" maybe true, but anyone with a standard variable rate from just about every single lender will NOT be paying more than their advertised rate. If you bothered to ask all the big lenders they will willingly put this in writing.

Why don't these main stream lenders stop playing games and just quote the rate they are willing to give if you are a borrower

The point is that you will not be paying more than their advertised rate. With Myrate, you just don't know what you will be paying in a years time (there goes that comparison rate again). You even say yourself "Do your own research to see which lender provides not only the best interest rate but also Comparison Interest Rate. Again, because clearly you don't understand finance too well either, the comparison rate becomes totally meaningless.

MyRate have certainly demonstrated the most consistantly lowest interest rates on the market

Almost true, you forgot to add the bit about "Applicable To New Loans Only" - After day 1, you are just another existing customer, ripe for fleecing.

 

[Aaron_C]

I think people who are pre-occupied with 'low rates' deserve what they get. It's not always about the interest rate - it's what you get for that interest rate and whether the loan is suitable to your situation.

 

[buzzlightyear]

I think people who are pre-occupied with 'low rates' deserve what they get. It's not always about the interest rate - it's what you get for that interest rate and whether the loan is suitable to your situation.

Can we have both please....

 

[Aaron_C]

Can we have both please....

That's what I'm here for

 

[Seeto]

I think people who are pre-occupied with 'low rates' deserve what they get.

An unbelievable comment, especially from a broker. Do you not give a stuff about anyone but your own customers? Or do your feelings extend to them as well?

At least do the decent thing and keep it on topic.

 

[Aaron_C]

An unbelievable comment, especially from a broker. Do you not give a stuff about anyone but your own customers? Or do your feelings extend to them as well?

At least do the decent thing and keep it on topic.

No, I suggest you get off your high horse. People need to understand that 'cheap' doesn't always mean better. The fact that I am a broker places me in a better position to see this from the home loan perspective. I take good care of my clients and of others that I come into contact with - but as every other broker here can emphathise with - I hate timewasters.

 

[Rolf Latham]

An unbelievable comment, especially from a broker. Do you not give a stuff about anyone but your own customers? Or do your feelings extend to them as well?

At least do the decent thing and keep it on topic.

Hi Seeto

I think what Aaron is trying to say is that a focus on rate only almost always ends in tears ..................for the borrower AND the broker.

ta

rolf