Online lender loans.com.au has set a new floor for home loan interest rates by slashing its variable rate for homebuyers to just 3.52%.
Managing Director Marie Mortimer said the decisive 12 basis point cut would force the banks to lower their rates or continue losing market share to loans.com.au.
“We have grown from nothing in 2011 to almost $6 billion in loans under management today by consistently offering the lowest interest rates to Australian borrowers,” Ms Mortimer said.
“We may not be as big as the top banks – yet – but we are driving real competition in the market by offering rates and exceptional service that they can’t afford to ignore.”
For owner occupier borrowers who are purchasing or refinancing, loans.com.au has dropped the rate on its streamlined Essentials product to just 3.52 per cent, and its Offset product to 3.60 per cent.
For investors, the innovative Smart Loan Package starts at 3.89%, rewarding investors for having both their investment property and owner occupier property with loans.com.au.
loans.com.au also made big rates cuts for stand alone investment property products, for both purchasers and those who are refinancing.
Ms Mortimer said the new rates would help loans.com.au in its mission to rapidly drive online lending from five to 25 per cent of the Australian lending market and break the bank lending club which was not delivering value to Australian borrowers.
“Borrowers who come to us can apply online at their convenience, say goodbye to paperwork and receive personal service from our Aussie team,” Ms Mortimer said.
“Instead of needing reasons to use an online lender, borrowers should be asking themselves why on earth they wouldn’t use us when it is so much easier and they can save thousands over the life of a typical loan.”
Supported by loans.com.au’s rapid growth, parent company Firstmac has surged to become the 14th largest residential mortgage lender in Australia, ahead of household names including Citbank, Heritage Bank, and Newcastle Permanent. It is also Australa’s largest non-bank lender with aspirations to become an ADI and compete even further in the online banking space.