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RACQ Bank debuts with 13 branches

RACQ Bank debuts with 13 branches

One of Australia’s largest member organisations has just opened a mutual bank, which it claims will be “a trusted alternative to shareholder-owned, profit-hungry banks”.

RACQ Bank, which has been launched by the Royal Automobile Club of Queensland, has 13 branches, located in Brisbane, Gold Coast, Ipswich, Toowoomba, Cairns and Townsville.

The bank offers home loans, car loans, personal loans, credit cards, savings accounts, transaction accounts, term deposits and financial planning.

Customers have access to a mobile app, and can make payments through Android Pay, Apple Pay and Samsung Pay.

According to the RACQ, it is the first automobile club in the world to launch a mutual bank.

RACQ promises to reinvest profits

RACQ chief executive Ian Gillespie said the new bank would allow the RACQ to provide better service to its more than 1.6 million members.

“We’re committed to giving members honest, easy and great-value banking products and services, without any hidden fees or excessive charges,” he said.

“We’re also one of Queensland’s last remaining mutual banks, and we are working for our members not for shareholders. Any profits the bank makes will be reinvested back into the RACQ ecosystem for the benefit of our members here in Queensland.”

Mr Gillespie added that RACQ had established digital platforms “equal to those of any top-level bank in the country”.

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Why does Westpac charge an early termination fee for home loans?

The Westpac home loan early termination fee or break cost is applicable if you have a fixed rate home loan and repay part of or the whole outstanding amount before the fixed period ends. If you’re switching between products before the fixed period ends, you’ll pay a switching break cost and an administrative fee. 

The Westpac home loan early termination fee may not apply if you repay an amount below the prepayment threshold. The prepayment threshold is the amount Westpac allows you to repay during the fixed period outside your regular repayments.

Westpac charges this fee because when you take out a home loan, the bank borrows the funds with wholesale rates available to banks and lenders. Westpac will then work out your interest rate based on you making regular repayments for a fixed period. If you repay before this period ends, the lender may incur a loss if there is any change in the wholesale rate of interest.

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Deciding whether to buy an investment property with cash or a mortgage is a matter or personal choice and will often depend on your financial situation. Using cash may seem logical if you have the money in reserve and it can allow you to later use the equity in your home. However, there may be other factors to think about, such as whether there are other debts to pay down and whether it will tie up all of your spare cash. Again, it’s a personal choice and may be worth seeking personal advice.

A mortgage is a popular option for people who don’t have enough cash in the bank to pay for an investment property. Sometimes when you take out a mortgage you can offset your loan interest against the rental income you may earn. The rental income can also help to pay down the loan.

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If you’re an Australian citizen living and working abroad, you can borrow to buy a property in Australia. With a Westpac non-resident home loan, you can borrow up to 80 per cent of the property value to purchase a property whilst living overseas. The minimum loan amount for these loans is $25,000, with a maximum loan term of 30 years.

The interest rates and other fees for Westpac non-resident home loans are the same as regular home loans offered to borrowers living in Australia. You’ll have to submit proof of income, six-month bank statements, an employment letter, and your last two payslips. You may also be required to submit a copy of your passport and visa that shows you’re allowed to live and work abroad.

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When you take out a fixed interest home loan with the Commonwealth Bank, you’re able to lock the interest for a particular period. If the rates change during this period, your repayments remain unchanged. If you break the loan during the fixed interest period, you’ll have to pay the Commonwealth Bank home loan early exit fee and an administrative fee.

The Early Repayment Adjustment (ERA) and Administrative fees are applicable in the following instances:

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  • If you repay over and above the annual threshold limit, which is $10,000 per year during the fixed interest period
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The fee calculation depends on the interest rates, the amount you’ve repaid and the loan size. You can contact the lender to understand more about what you may have to pay.