The Aussie Optimizer Plus loan offers attractive variable and fixed interest rates and flexible features which make it possible for borrowers to substantially reduce interest costs. A bonus is that there is no upfront fee, setting it apart from many home loans on the market.
Another big attraction for cashed-up borrowers is that Aussie offers discounted rates for people with bigger deposits so the less you borrow as a proportion of the property’s value, the lower the interest rate.
The loan may suit an owner-occupier or investor who wants a mortgage with some decent repayment options without hefty fees. Once your loan is up and running, there is a moderate ongoing annual fee.
Borrowers can choose between variable or fixed home loans or split a home loan between these two loan types with up to six splits possible. The variable loan offers flexible features such as the ability to make unlimited repayments and free redraws, as well as a 100 per cent offset account facility.
The minimum loan amount is $100,000 while Aussie will assess the maximum amount on a case-by-case basis.
More specific product information is available here.
Aussie Optimizer Plus Variable Loan
The Aussie Optimizer Plus Variable Loan charges a relatively low annual fee however this will accumulate over 20 or 30 years’ time so it is worth factoring it into your overall costs.
Borrowers can choose fortnightly or monthly repayments, with more regular repayments allowing you to cut interest costs. You can take the variable loan for up to 30 years for principal and interest repayments and choose to have an interest-only option for up to five years, where payments towards just your interest are due on a monthly repayment schedule.
Another big plus is that you can get a 100 per cent offset facility on the Aussie Optimizer Plus Variable Rate loan, which incurs no electronic or counter transaction fees. This is a great home loan facility as savings in this account are offset daily against your outstanding home loan balance, helping you to reduce the interest payable on your mortgage.
Borrowers can also make additional repayments at any time on the Aussie Optimizer Plus Variable loan. This feature will help you save substantially on interest costs if you have spare money to put into your mortgage. In addition, Aussie won’t charge you a fee to redraw these funds via the internet or telephone access, although the minimum amount you must redraw is $100.
You can choose to split your loan between up to six different loan products at no additional cost, which is a big plus as some other lenders would charge you a few hundred dollars to split your loan into several different portions.
Aussie Optimizer Plus Fixed Loan
For the fixed rate options, Aussie offers competitive fixed rates that can be taken over one, two, three, four or five year terms. Fixed loans can be repaid fortnightly or monthly and you can borrow up to 95 per cent of the property’s value under a fixed loan with lenders mortgage insurance.
Borrowers can repay up to five per cent of the original fixed loan amount every year without incurring penalties. That is a relatively modest amount of $10,000 on a loan of $200,000, but a potentially generous amount if you borrow more. So on a $500,000 mortgage, for example, extra repayments would rise to $25,000 a year, which is generous compared to some other lenders, who typically limit fixed loan repayments to under this amount.
Aussie will charge a fee if borrowers terminate the loan or repay it before the end of agreed fixed period, but this is pretty standard on fixed home loans offered by any lender.
While there is no upfront fee, the ongoing annual fee may add up over time, especially if you don’t use the features on the loan such as the offset account. There is also a discharge fee when you finish your loan which is relatively high. Other fees that may sting include a loan portability fee when you want to shift your loan to a new property and a fee if you want to increase your principal loan amount after six months of settlement. Some lenders don’t place such a time limit on requests to increase borrowings.
Repayments are only allowed on principal and interest loans on a fortnightly or monthly basis, so you don’t get the option to repay weekly. However, this won’t stop you from reducing interest costs over the life of the loan because you have the use of the 100 per cent offset account.
Interest-only repayments on variable loans are limited to five years which may not suit some investors as they sometimes prefer interest-only repayments to maximise interest deductions and pay the lowest possible loan instalments.
If you’re after a fixed loan, there are some other catches. The fixed term periods available are limited from one to five years, which may put off borrowers who want to protect against interest rate rises for a longer period. The limits on extra repayments may also deter some fixed rate customers.
The verdict after review
If you’re after a fancy variable rate loan that offers flexibility and economy at the same time, then the Aussie Optimizer Plus Variable Rate loan may suit, whether you’re an owner-occupier or investor. The lack of an upfront fee helps to set the Aussie Optimizer Plus Variable Rate apart and is an appealing feature to borrowers of all types.
The added extras on the Aussie Optimizer Plus Variable Rate Loan such as an offset account and penalty-free early repayments can help borrowers cut interest costs and their total loan amount substantially over the life of the loan.
Moreover, Aussie offers competitive interest rates on both fixed and variable loans and you can split your home loan at no cost. The higher interest rate discounts for larger borrowing amounts will also be a draw card for borrowers.
There are some catches that are worth being aware of – in particular, the ongoing fee which will add up over time. The portability fee and higher discharge fee may also put you off, so you’ll need to weigh up their likely impact on your circumstances after a full variable and fixed loan review.
Fixed rate borrowers will be attracted to the relatively low interest rates that Aussie can offer however this products is significantly less flexible than its variable counterpart, with no redraw facility and limitations on extra repayments.
Borrowing with Aussie
Aussie was founded in 1992 and is Australia’s largest mortgage broker.
Set up as specialists in home loans, they are now home to hundreds of retail franchises across the country. They also run a mobile lending service and have a customer service call centre that operates six days a week along with 24/7 online account services.
Aussie has been primarily owned by the Commonwealth Bank since 2012.
Note: This review provides general information about the above home loan. Any views expressed are the author’s own. It is not intended to be a recommendation of a particular product. To the extent that this commentary may constitute general advice, this advice is of a general nature and does not take into account your individual objectives, financial circumstances or needs. We recommend that before you make any financial decision you seek professional advice from a suitably qualified adviser and read the PDS. Read more about our important disclosures here.