RateCity Gold Awards 2020
Finding Australia's best loans and financial products has just been made easier.
While you can always rely on RateCity's Real Time Ratings™ to provide Australia's most accurate and up-to-date loan ranking and rating system based on your own requirements, RateCity is now cutting the work out of the equation and awarding Australia's best loans, financial lenders, and products with a coveted RateCity Gold Award.
Over 4000 products were analysed and compared from a variety of lenders and providers, and only the top ten percent were deemed winners. Using the power of Real Time Ratings™ to understand the financial product landscape, and how price and fees have changed over the past year, RateCity has done the hard work, finding the best loans, the best products, and the best lenders for 2019 to give you a head start in 2020.
RateCity Gold Awards Categories 2020
How RateCity works out the Gold Award winners
RateCity has been comparing financial products for more than 13 years, and this has enabled us to develop the market-leading Real Time Ratings™ system, the cornerstone of our awards.
RateCity’s Real Time Ratings™ gives every home loan in our database a score out of five, based on factors such as rate, fees, features, and flexibility. Importantly, these ratings are run every day to capture product changes including rate cuts and specials, factors that are often missed by ratings and awards systems calculated at one or two points in time.
The RateCity Gold Award winners are then determined by averaging the daily Real Time Ratings™ scores over a six month period to identify the most consistent top performers in each category. We recognise that there is no 'one size fits all’ product, which is why we have divided up the awards into different categories to help consumers in their decision-making process.
There some genuinely great products and lenders in the market, but we can't give every player a prize. Lenders need to do serious work to help customers and provide the best products in Australia. RateCity's Gold Awards highlight the products and lenders doing just that, and help you make your decision that much easier.
Real Time RatingsTM ranks home loans according to cost and flexibility. This allows you to compare products using a simple score out of five.
Our world-first system analyses almost 4,000 mortgages based on your individual requirements. Best of all, the results are generated in real time, so if a lender has just hiked its interest rates or introduced extra fees, our system has factored this in.
Most comparison sites give you information about rates, fees and features, but expect you’ll pay more with a low advertised rate and $400 ongoing fee or a slightly higher rate and no ongoing fee. The answer is different for each borrower and depends on a number of variables, in particular how big your loan is. Comparisons are either done based on just today or projected over a full 25 or 30 year loan. That’s not how people borrow these days. While you may take a 30 year loan, most borrowers will either upgrade their house or switch their home loan within the first five years.
You’re also expected to know exactly which features you want. This is fine for the experienced borrower, but most people know some flexibility is a good thing, but don’t know exactly which features offer more flexibility than others.
What is the flexibility score?
Today’s home loans often try to lure borrowers with a range of flexible features, including offset accounts, redraw facilities, repayment frequency options, repayment holidays, split loan options and portability. Real Time Ratings™ weights each of these features based on popularity and gives loans a ‘flexibility score’ based on how much they cater to borrowers’ needs over time. The aim is to give a higher score to loans which give borrowers more features and options.
They’re not always timely
In today’s competitive home loan market, lenders are releasing new offers almost daily. These offers are often some of the most attractive deals in the market, but won’t get rated by traditional ratings systems for up to a year.
The assumptions are out of date
The comparison rate is based on a loan size of $150,000 and a loan term of 25 years. However, the typical loan size is much higher than that. Million dollar loans are becoming increasingly common, especially if you live in metropolitan parts of Australia, like Sydney and Melbourne. It’s also uncommon for borrowers to hold a loan for 25 years. The typical shelf life for a home loan is a few years.
The other problem is because it’s a percentage, the difference between 3.9 or 3.7 per cent on a $500,000 doesn’t sound like much, but equals around $683 a year. Real Time Ratings™ not only looks at the difference in the monthly repayments, but it will work out the actual cost difference once fees are taken into consideration.
Real Time RatingsTM looks at your individual home loan requirements and uses this information to rank every applicable home loan in our database out of five.
This score is based on two main factors – cost and flexibility.
Cost is calculated by looking at the interest rates and fees over the first five years of the loan.
Flexibility is based on whether a loan offers features such as an offset account, redraw facility and extra repayments.
Real Time RatingsTM also includes the following assumptions:
- Costs are calculated on the current variable rate however they could change in the future.
- Loans are assumed to be principal and interest
- Fixed-rate loans with terms greater than five years are still assessed on a five-year basis, so 10-year fixed loans are assessed as being only five years’ long.
- Break costs are not included.
A comparison rate calculates the cost of a $150,000 loan over 25 years. While a comparison rate is a good industry benchmark, it doesn’t consider your specific lending requirements.
Real Time RatingsTM factors in essential information like your loan size, your loan-to-value ratio (LVR), whether you want an offset account and whether you are an investor or an owner-occupier.
Real Time RatingsTM was developed to save people time and money. A home loan is one of the biggest financial decisions you will ever make – and one of the most complicated. Real Time RatingsTM is designed to help you find the right loan. Until now, there has been no place borrowers can benchmark the latest rates and offers when they hit the market. Rates change all the time now and new offers hit the market almost daily, we saw the need for a way to compare these new deals against the rest of the market and make a more informed decision.