BOQ Clear Path Loan Review

Darren Pearce
Jul 14, 2016( 7 min read )

The basics

The BOQ Clear Path Variable Home Loan provides many of the perks of a fully-featured home loan with a competitive low rate that owner-occupiers and investors will both appreciate.

In what is now a standard feature of many loans, BOQ offers a discounted interest rate on your loan depending upon your circumstances and the amount you wish to borrow. Lower rates may be available for owner-occupied loans when borrowing over a specified amount, so it’s worthwhile negotiating with the bank on this basis.

A review of the highlights

If you need your loan to come with a range of options including redraw, offset and repayment flexibility, you will find these included in the package. The BOQ Clear Path Variable Home Loan includes a fee-free 100 per cent offset facility, which allows you to save on the amount of interest you must pay and helps reduce your loan term. When the loan is linked to a mortgage offset account, the interest is calculated daily on the total outstanding loan amount less the total funds in your offset account. For example, if you have a loan of $350,000 and your offset account balance is $10,000, interest is charged on the amount of $340,000. This could amount to thousands of dollars of interest savings over the term of your loan.

At the very start of your loan you may not foresee a time when you can make extra payments, however this can be a valuable option to help accelerate you toward being mortgage free sooner later down the road. The BOQ Clear Path Variable package allows you to make additional payments towards your home loan balance without any penalty charges, potentially reducing the life of your loan.

If you want repayment flexibility, the BOQ Clear Path Variable Home Loan provides you with both principal and interest or interest-only options. Paying only the interest component on your loan helps to reduce your regular commitment while you build up extra funds or the equity in your property. You can also choose to set your repayments at monthly, fortnightly or weekly to work with your income schedule.

If accessing the extra funds you’ve built up in your loan is important to you, the BOQ Clear Path Variable Loan provides you with a redraw facility with fee-free access. This means you can access your funds with no penalties and no limit on how many redraw transactions you can make – but keep in mind you are required to redraw a minimum amount each time.

Some first-home buyers will be attracted by the minimum deposit amount of five percent for owner-occupiers. However, if you have less than a 20 per cent deposit you will be required to pay Lender’s Mortgage Insurance. It can either be paid upfront or capitalised into the loan, but can work out to be a significant chunk of your home loan. The BOQ Clear Path Variable Home Loan also offers new customers the incentive of one free valuation with this loan.

More specific information on the BOQ Clear Path Variable Home Loan is available here.

A review of the lowlights

The Bank of Queensland Clear Path Loan has upfront fees, a discharge fee when you finish up your loan and a small monthly fee, which may seem minor however it can add up over the life of the loan – particularly if you take out a loan for 25 or 30 years. Together, these fees are in many cases less than the fees charged by the big four banks, however other mid-tier competitors and non-banking lenders do feature no annual or ongoing fee products so it’s always worth asking for a discount or to have these fees waived when applying.

If you want certainty against interest rate rises, a variable loan may not match your risk profile. You may then want to take advantage of the split loan facility to get the best of both worlds. The BOQ Clear Path Variable Home Loan can be split between fixed and variable rates; however, a fixed loan application fee applies.

The BOQ Clear Path Variable Home Loan is a full documentation loan, which means you will need to provide comprehensive financial, employment and personal information. This can sometimes prove difficult for some self-employed and contractors who may not have the proof of income documents usually required to apply for a home loan. In this case, BOQ offers a low doc option, however you will need to accept a higher interest rate.

With the proliferation of home loan products available to consumers, it’s important to ensure that you select the one which best suits your own circumstances. BOQ aims to cater for a range different borrowers and borrowing needs and provides home loan alternatives suitable for different priorities such as fixed interest rates, line of credit facilities, bridging finance and low doc options.

About BOQ

As one of Australia’s fastest growing banks, the Bank of Queensland (BOQ), positions itself as a capable alternative to the big four, offering a range of competitive fully featured loan products and a convenient array of branch-based, phone and online banking services.

BOQ has come a long way from its regional Queensland roots, but still boasts a personal customer-service focus, driven in part by the fact that each branch is owned and operated by staff.  With over 200 branches located around Australia, BOQ provides the traditional banking model for those preferring local convenience and a more personal banking experience.

The more tech-savvy can take advantage of BOQ’s online, mobile and telephone options – since you can manage all of your account’s key features through the internet banking portal or through the BOQ mobile app.

The verdict

If you are in the market looking for a loan which offers you flexibility, convenience and additional features together with a competitive interest rate, then the BOQ Clear Path Variable Home Loan may provide you with the reassurance and personal banking experience of a mainstream bank without as many fees.
With its Clear Path Variable Home Loan, BOQ has created a product which will appeal to customers who enjoy branch convenience and the peace of mind of a big bank, but who are looking for a change. The Clear Path Variable Home Loan can be a good match for those wanting a balance between a competitive rate, reduced fees, maximum flexibility and a more personal banking relationship.

The bottom line

When choosing a home loan, it’s important to work out what you want from your loan and how much it will cost you. Given the wide range of loans on offer, different interest rates, product features and fees, it pays to shop around to find the loan that fits your needs and circumstances.

Some loans offer features that may be appropriate for your situation and result in savings over the life of the loan.

The terms and conditions associated with financial products can be confusing so if you don’t fully understand the commitment you’re about to enter into, it may be worth seeking professional advice to ensure the appropriateness of the product before moving forward.

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.

About the author

Darren Pearce

Darren Pearce is a personal finance expert and freelance writer.

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