Online lender TicToc has cut interest rates on its home loans a fortnight before a possibly historic rate cut, positioning its product alongside some of the most competitive in the market.
The company, renowned for its quick turnaround times and backed by both Bendigo and Adelaide Bank, slashed interest rates today on its variable home loans.
Take out the revised principal-plus-interest home loan and the advertised rate will be 2.19 per cent. Minimal fees help keep the comparison rate low too at 2.20 per cent.
“This home loan is perfect for anyone looking to buy or refinance their home,” Laura Osti said, head of marketing at TicToc.
“The best part is, our digital application and assessment process means a faster and simpler experience.”
What other important info should I know?
Home buyers will need a deposit of 10 per cent to be eligible. Keep in mind a deposit below 20 per cent will likely incur lenders mortgage insurance, a bank tax that generally costs thousands.
Most variable home loans come with an offset account, a transaction account where the repayments made reduce the balance owing, but can also be withdrawn if needed. Tic:Toc is offering an offset account as an option on its variable rate loan.
The online bank boasts a speedy turnaround time on applications due to its “auto assessment” technology.
“The minimum days between one of our customers being approved and settled is just three days,” a company spokeswoman said. They did not provide info on maximum.
Switch from a big four bank and it could lead to savings
People who hold a mortgage with one of the big four banks could potentially save thousands in interest costs by refinancing onto the revised product, a RateCity analysis found.
A Commonwealth Bank customer, for instance, on a comparable loan offering the current 3.13 per cent interest who refinances their $400,000 mortgage with TicToc’s aforementioned variable loan could save $3729 over the first year and $17,878 over five years.
Over 25 years, they could save $57,402.
How does it rank compared to other home loans?
A RateCity analysis found the offer is among the top ranking products on the market, at the time of publication, taking out the top spot in some cases.
Out of 413 variable home loans, TicToc’s offering ranks sixth -- ahead of 407 competing products.
Compare it to similar products that take a deposit of 10 per cent, and TicToc’s product ranks first, besting 321 products.