As the property market continues to rise and competition to buy a house grows fierce, Australians want home loans – and they want them now. ABS data shows that home loans issued have increased by 10.5% over January.
Many mortgage companies claim to be able to get you the best home loan deal. The mortgage is one of your most important financial decisions. Choosing the right lender could make all the difference in your financial success.
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How is the average borrower to determine the right lender? It’s not like we can all be experienced industry professionals who know the exact essential qualities of home loan products.
That’s why we enlisted thousands of industry-leading mortgage brokers across a 12-week research process to ascertain what features they thought were most important from a home loan lender, and which lenders best exemplified these features.
These are the most important features for a mortgage broker:
Processing and approval are expedited with quick response
Research shows that speed of approval and processing is the most important aspect when selecting a lender. Ninety-one% of those interviewed said that speed and ease of approval for a home loan application was important to them or the most important consideration when choosing a lender. This is understandable, as the housing market is moving quickly and delays could lead to borrowers losing their home.
Low Interest Rates
The next most important consideration when choosing a mortgage provider, according to our results, is the lender’s interest rates. Eighty-three percent of respondents rated a lender’s interest rate as important or most important. The lower your interest rate, the more you will pay over the life of your loan. This can save you thousands, if not even millions.
Excellent Customer Service
It can be difficult and frustrating to obtain a loan for your home. It’s no wonder that high quality customer service is another important feature to consider in a home loan provider – 70% of respondents said that great customer service was important or most important when choosing a mortgage lender. A home loan provider’s experience can be improved if you are treated like a person working together to achieve your goals and not as a faceless, bureaucratic number.
Interest rates might be the most obvious part of a home loan to consider but you shouldn’t overlook the fees and other additional costs that home loan products often entail. The fees associated with your home loan should be reviewed by mortgage professionals. In fact, 53% of respondents ranked fees as the most or most important aspect of a lender.
Flexible Online Options
With the evolving landscape of COVID-19, lenders are more concerned about technological accessibility. 30% of respondents rated online banking as the most important or most important feature.
Once we had established our criteria, we evaluated a large number of lenders within these categories using feedback from mortgage professionals as well as customers.
Continue reading: Revealed – Australia’s top brokerages of 2021
The 10 highest rated lenders are:
1. Heartland Reverse mortgages
Heartland Reverse Mortgages are Australia’s leading reverse mortgage provider established in 2004.
“At Heartland we believe that what sets you apart from another [lender] is doing the right thing by the customer, which is why we place such emphasis on our duty of care with our reverse mortgage,” says head of operations Sharon Yardley.
Homeloans.com.au, an award-winning provider offering flexible and competitive home loans for investors and owner-occupiers, is a leading provider. Resimac Group Ltd has owned it since 1985. They were awarded Non-Bank of the Month at the 2020 Australian Mortgage Award.
“Small yet significant details like the ease of application, approval turnaround times, and the overall customer service experience, not just pre-settlement, but throughout the entire life of the loan,” says chief executive officer Scott McWilliam. “For a complex transaction like a home loan, the ability to keep things as simple and friction-free as possible certainly separates the wheat from the chaff.”
3. La Trobe Financial
Since 1952, La Trobe Financial has provided funding and investment solutions for a wide range of customers. The residential loans offered by La Trobe Financial are flexible and can be used to meet a variety of requirements, including refinance, purchase, or business/investment.
“Non-bank financial institutions such as La Trobe Financial are ideally suited to providing credit to credit-worthy applicants appropriately throughout this period, thanks to the custom nature of our credit assessments and willingness to take the time to fully understand their unique position, and provide an appropriate tailored solution to meet their objectives and requirements,” says La Trobe Financial’s head of origination channels Chris Meaker.
4. Better Choice
Better Choice is one of Australia’s leading and most innovative mortgage lenders. They work closely with mortgage brokers and offer innovative and personal solutions to customers, including first-home buyers, investors, construction, bridge finance, SMSF, and non-residents.
Better Choice can accept alternative income documentation. This makes them the preferred lender for brokers working with customers who are not able to provide the two-year financial statements and tax returns required to obtain financing.
5. Macquarie Bank
Macquarie Bank was founded in Sydney and has been in Australia ever since. The first Macquarie Bank Limited was a three-person branch that operated under the name Hill Samuel Australia. It received an Australian banking licence in 1985 as Macquarie Bank Limited.
Macquarie Group has over 28 offices around the world, including in the United States and Hong Kong. Macquarie Bank has won numerous awards including Money Magazine’s 2014 Best of the Best award for Cheapest Home Loan Package.
6. Commonwealth Bank
Commonwealth Bank of Australia (CBA) is one of Australia’s “Big Four” banks. It was established in 1912 as a public bank. Since then, it has become a private multinational company with over 1,100 locations worldwide in Asia, Europe and North America.
Beyond their standard variable and fixed rate loans, one of CBA’s most popular products is the “Extra Home Loan,” which allows borrowers to save at the front end of the mortgage with an introductory rate, or gives a discount for the life of the loan – or if you are a first time home buyer, both.
ING is the world’s largest savings bank. Since 1999, ING has provided Australians with a range of low-rate, flexible home loans. ING is an online lender. Customers get the benefits of not having to open branches and can enjoy discounted rates and waivers on fees.
ING doesn’t have any branches where customers can go to see them in person, so their online accessibility is limited and they offer excellent customer service.
Firstmac was established in Brisbane as a family business over 40 years ago. It has since grown to be one of Australia’s most trusted non-bank lenders. They offer straightforward home loans to everyday Australians, who don’t want to be tied down by the big banks.
Firstmac says “We are dedicated to bringing simple, affordable, competitive financial products to market, underpinned by a lengthy track record of success and a pedigree in prime residential home loans.”
9. Adelaide Bank
Adelaide Bank was established in 1994, originating from the Co-operative Building Society of South Australia, which was at the time the nation’s largest building society.
In 2007, they merged with Bendigo Bank to form Bendigo and Adelaide Bank Limited, Australia’s fifth largest bank. Adelaide Bank provides a range of flexible and simple home loans products as well as dedicated customer service.
National Australia Bank (NAB) is another one of the “Big Four” banks in Australia and one of the top 50 banks in the world. NAB, which was founded in 1858 as National Bank of Australasia has been a multinational bank ever since they opened the first international office in London in 1864.
NAB offers borrowers the opportunity to bundle home loans with other products – like credit cards or home and contents insurance – at a reduced interest rate, as well as offering offset accounts and similar benefits on other loans.