Advantage Essentials Loan Review

Sally Tindall

Sally Tindall

Jul 15, 2016( 7 min read )

The basics

Mortgage House is a leading non-bank home loan brand, offering customers numerous mortgage options to suit a variety of borrowers’ needs with an array of loan types.

For those who value a competitive interest rate but don’t want give up repayment flexibility, additional features and banking convenience to get it, the Mortgage House Advantage Essentials Loan is available to owner-occupiers, first home buyers and refinancers – and is worth reviewing.

The Mortgage House Advantage Essentials Loan provides some of the features of a fully featured home loan, such as 100 per cent offset and redraw facilities, without all of the fees. Owner-occupiers and those looking to refinance will appreciate the competitive variable interest rate, which comes with no application fees and no annual package fees. You will need to budget for set-up fees, loan settlement and discharge fees, however these are broadly in-line with other lenders. As a rule, it’s good practice to check for the latest deals and negotiate your best outcome based on competitive alternatives.

Mortgage House is similar to its many competitors in that it will carefully consider your personal circumstances, the amount you wish to borrow and, of course, the size of your deposit and base your interest rate on those variables. Owner-occupiers with a deposit which totals 20 per cent or more of the property value are seen as lower risk and therefore avoid the additional costs of lenders mortgage insurance, so it’s worthwhile negotiating with the bank to get the best rate possible.

More specific information on the Mortgage House Advantage Essentials Loan is available here.

The highlights

The Mortgage House Advantage Essentials Loan offers a low variable interest rate which can be 100 per cent offset with a fully transactional account. 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. This is a great way to reduce the interest charged on your mortgage and can help you save thousands in interest payments over the life of your loan.

A key feature of the Mortgage House Advantage Essentials Loan is its portability. Customers have the ability to move with their mortgages. You can transfer your existing loan to another property without the need to refinance and avoiding having to pay a number of upfront costs, such as mortgage application and establishment fees, again.

Sometimes, the discipline of making additional payments on your loan becomes easier when you have the option to get these extra repayments back at a later date. The Mortgage House Advantage Essentials Loan provides a redraw facility with fee-free access. There is no minimum redraw amount and there is no limit on how many redraw transactions you can make.

If you are in a position to make additional repayments on top of your minimum loan repayment, you can significantly reduce the length and cost of your loan, helping you to be ‘mortgage free’ that much sooner. The Mortgage House Advantage Essentials Loan allows you to make additional payments on your home loan without incurring any additional charges.

Mortgage House Advantage Essentials Loan provides an opportunity to split your loan between variable and fixed rates – giving you the best of both worlds. This can benefit those customers wanting to balance the risks of interest rate movements. Bear in mind that some fees apply to enable this feature.

The lowlights

Mortgage House has strict employment guidelines around who qualifies for this loan, so it’s worth checking if you fit the criteria. In addition to the special employment conditions, the loan is a full documentation loan which requires a complete range of personal and financial information along with employment details in order to have your application processed in the normal timeframe. This can be an issue for some self-employed customers who are looking for a non-major bank, low doc loan option.

Like most banks and non-bank lenders, Mortgage House will tend to offer its most competitive rates depending upon your circumstances and the amount you wish to borrow. The lowest rates are available for owner-occupied loans when you have a deposit of 20 per cent of the value of the property. Some borrowers may be unable to fund a 20 per cent deposit and will not be eligible for this loan. In this case, it is good practice to check for the latest offers and negotiate your best deal based on loans accommodating lower deposit amounts.

If you want repayment flexibility, the Mortgage House Advantage Essentials Loan provides you with the freedom to set your repayments at weekly, fortnightly or monthly to work in with your income and budget, however this applies to principal and interest repayments only.  This package does not offer an interest-only option, which can be an important feature if you want to free up extra cash when cash flow is tight by paying just the interest component on your loan.

With the wide choice of home loan products available to consumers, it’s important to ensure that you review the options and select the loan which best suits your own circumstances. Mortgage House provides a range of home loan alternatives suitable for different customers such as first home buyers, investors and those wanting to build their home on vacant land.

The verdict

If you need your loan to come with a competitive rate and a range of options, including redraw and offset facilities, you will find these included in this package.

The Mortgage House Advantage Essentials Loan will not suit customers more accustomed to a traditional branch relationship. Mortgage House maintains that it is able to offer very competitive rates by keeping its overheads lower. It offers some broker centres, however these are located in NSW, Victoria and the ACT only. Instead, Mortgage House seeks to accommodate customers’ needs with fast and easy access provided with online banking and phone via Mortgage House Express Line.

With the 100 per cent offset account, your funds can be accessed for free from over 2,000 ATMs across Australia.

If you fit the stringent employment conditions, have a preference for a digital banking experience and prefer a loan with a number of features – with a balance between price, flexibility and convenience – then the Mortgage House Advantage Essentials Loan can be a good match for your home loan objectives and banking lifestyle.

The bottom line

Choosing a home loan is a huge decision and one that may have implications for two or even three decades, so it is important you take the time to do your due diligence to determine if this loan package is a good fit.

It’s all a matter of finding the home loan that will be the best match for your individual circumstances.

If you are in any way unsure, it could be worthwhile to seek professional financial advice to determine if this product is the right one for you.

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

Sally Tindall

Sally Tindall

Sally Tindall is RateCity's Money Editor.

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