If your main priority is finding a home loan with a highly competitive interest rate, you may find what you’re after with loans.com.au’s Move Fast Special.
The Move Fast Special’s variable interest rate is very low compared to other variable rates on the home loan market. It also comes with a number of useful features such as unlimited extra repayments, a free redraw facility, portability, a conveyancing voucher and a variety of fixed and variable rate split loan options.
There are some significant constraints in place: you can only borrow up to $500,000 to fund the purchase of an owner-occupier property – ruling out investment purchases – and you need a twenty per cent deposit in order to be eligible for this loan. It’s also worth noting that loans.com.au is an online only lender, so if dealing with login accounts, passwords, online application forms and Internet banking is not your cup of tea, the Move Fast Special may not be the right option for you.
A review of the highlights
Getting a home loan with an online lender can potentially save you money in interest, as what these lenders save on the cost of branches, they pass on to borrowers – usually in the form of lower interest rates. Loans.com.au – self-described as a lender that is “all clicks, no bricks” – is a prime example. The Australian-owned online lender is based in Brisbane’s CBD and offers some very competitive interest rates, especially when compared to rates offered by the big four banks.
Along with a low variable rate, loans.com.au’s Move Fast Special home loan comes with a number of worthwhile features. You can choose to make repayments on a weekly, fortnightly or monthly basis, giving you the ability to coordinate repayments with your pay schedule or around other bills. The loan is portable, so you can transfer it to another property if you decide to move in the future. You can make an unlimited number of additional repayments, enabling you to pay it down your loan faster if your financial situation makes this possible. You can also redraw any extra payments made without incurring fees – although keep in mind this process is more time-consuming with loans.com.au compared to a bank, as you need to communicate with a customer care operator and submit an online request form, nominating which bank account the amount credited will go to.
Split loans are also available under this product. For those who want to combine the security of a fixed rate with the benefits of interest rate fluctuations, the Move Fast Special’s split loan facility gives you up to five free splits with fixed and variable options.
More specific product information about the Move Fast Special can be found here.
A review of the lowlights
Not all features are available on this home loan. There is no offset account; for those who want to build, there is no construction facility or progressive drawdown – a feature that allows you to draw the balance of your loan in stages, as required during a construction process. The Move Fast Special also only accepts principle and interest repayments. Having no ‘interest only’ option for repayments may be an issue in the future if, for example, your income dips and you need to take the pressure off financially.
The Move Fast Special comes with a number of fees, all of which can add up to a significant amount of money over the term of the loan. This includes an annual fee that is higher than the market average, a settlement fee, a discharge fee when you finish the loan, a “discharge document fee” and a valuation fee.
Some borrowers have the perception that online lenders, being smaller, newer and lesser known, are less secure from bankruptcy.
All lenders must adhere to regulations set by the Australian Securities and Investments Commission, ASIC. It’s important to check any lender you’re dealing with has an Australian Credit Licence number to show they are operating legally in Australia; loans.com.au has theirs displayed at the bottom of their website.
Online privacy concerns are also a concern for some. Loans.com.au uses Secure Sockets Layer or SSL, which is a standard security technology for ensuring data passed between a server and browsers remains private.
Who would this product suit?
Digital natives, rejoice: those who enjoy the speed and convenience of the Internet will appreciate loans.com.au’s onTrack system and mobile app. This program gives you 24/7 access to your loan account, allowing you to apply online and digitally move your loan from preapproval through to approval and settlement. Loans.com.au claims that once you have completed your online application, they can get preliminary approval to you within 48 hours. Customers are assigned their own personal lending manager, who acts as a point of contact for the whole process. A live chat service is also available if you have questions or hit a snag with your application.
A fully online process won’t appeal to everyone, though. If the thought of an electronic settlement makes you nervous and you’d prefer to talk with someone face-to-face about your home loan, the Move Fast Special’s online process may not work for you. An online only system may also be more of a hindrance than a convenience if your financial situation is complicated, or your loan needs are not straightforward. Although loans.com.au offers phone support between 7am to 7pm (Eastern Standard Time) Monday to Friday, some may find visiting a branch or office and having a personal conversation is easier for asking questions and discussing a complex situation.
The Move Fast Special will also financially suit some circumstances more than others. Due to the borrowing limit, this product may work for you if you are looking to borrow less than $500,000 – for example, if you plan to upsize to a new house and you want to refinance with another lender. If you’re borrowing much less that $500,000, keep in mind that Loans.com.au has other options which may be better suited, for example the Essentials Home Loan has a slightly higher rate than the Move Fast Special, but no ongoing fees. Make sure you compare the overall cost for your situation before making a decision. If you need a larger home loan, are planning on purchasing an investment property, want an offset account or require a low doc home loan, the Move Fast Special is not suitable for your needs – but again, Loans.com.au has other options which may suit.
The Move Fast Special’s competitive variable rate makes it a compelling offer on the surface, especially when compared to variable home loan rates on the market. However, the deal comes with a number of fees attached and some restrictions, so it’s a good idea to calculate how much money you will end up paying over the life of the loan, as the final amount may offset the low interest rate on offer.
It’s also worth reviewing whether you feel comfortable with managing the loan application process online. While having the latest technology at your fingertips is appealing for some, it may compel others to search for a home loan with a more traditional, bricks and mortar lender.
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.