We are constantly asked by customers, how can you offer such cheap home loans compared to some of the traditional lenders?
I thought I’d take time to answer this question.
At loans.com.au our business model is very different from traditional bricks and mortar lenders. We are online and technology centric, that means that our systems are very streamlined and innovative behind the scenes. We have a paperless office, which means we process all of our home loans using our innovative IT infrastructure.
Because of our smart technology and the fact that we don’t have an expensive branch network, we don’t have the bigger costs that some of our larger competitors have. We also deal with customers direct, so we don’t pay fees to mortgage brokers or other introducers. Customers come to loans.com.au direct, there is no middleman.
To give you some insight into the industry, if you look at our rates compared to say a major bank at the moment, the banks are about 0.5% to 1% higher than our rates. The extra interest is charged, because these banks have to cover their expensive branch network and advertising costs. Likewise, if a mortgage broker refers a customer to a bank, the bank will also pay the broker commissions. Retail Branches, Upfront Commissions and Trail Commissions are all factored into the higher interest rates that you are charged with traditional lenders.
At loans.com.au we don't have these expenses.
Because we are so competitively priced, we always get asked, ‘so what’s the catch’. It’s simple, there is no catch. Our innovative business model affords us the ability to keep our costs down and offer such competitive and affordable loan products to our customers.
Loans.com.au is part of a larger company, FirstMac Limited, which has been in business for over 32 years and is a non-bank wholesale lender who has funded loans for other home loan companies for many years. They have publically issued over $9.2 billion in Residential Mortgage Backed Securities (RMBS) and manage over $4.5 billion worth of loans.
We launched the loans.com.au brand due to the increased demand of Australians who are researching and applying for home loans online.To date we have seen such a positive response to our brand, with many customers coming to us by doing their own research online and also by word of mouth. We have recently won awards from Cannex, Your Money Magazine and Your Mortgage Magazine, recognising our great value for money products and our great brand.
By coming to loans.com.au you are essentially accessing our products direct from the funder. We have eliminated the expensive branch infrastructure and brokerage fees that you see with most of our competitors, and we pass these savings onto you with our competitive rates. You aren’t paying for any of these costs with us, we keep it simple so you get the full benefit and save.
If you want to know more about our award winning products please contact us or email us on 13 10 90.
By Marie Mortimer