ILLAWARRA CREDIT UNION

NON-BANK HOME LENDER OF THE YEAR

For many years, homeowners with mortgages have been blessed by low interest rates and fierce competition for their business from lenders. But now that the Reserve Bank has started lifting the official cash rate, a new dynamic has been ushered in – one in which home loan rates and, consequently, mortgage repayments, are only going in one direction: up.

For plenty of households, that will make choosing or switching to a low-cost home loan option even more important, particularly when other living costs are already putting a strain on budgets.

While fintech and online-only players might be front of mind when you think of competitive interest rates and low fees, lenders like the 2022 NonBank Home Lender of the Year, Illawarra Credit Union, have also been delivering on that front.

The Wollongong-based credit union beat other non-bank lenders to this year’s top prize, thanks to its particularly strong offerings in the basic and three-year fixed-term home loan areas.

Shining a light on one of its loan options, the credit union’s Bare Essentials home loan currently comes with a variable rate of 2.84%pa for regular owner-occupier borrowers with deposits as low as 5%, or a discounted variable rate of 2.79%pa for eligible first home buyers.

Despite the fact that interest rates are rising and are expected to keep heading in that direction for the rest of 2022 and into 2023, Illawarra Credit Union’s chief executive, Anthony Perkiss, has said he is encouraged by the financial position that most customers are currently in.

“Many of our customers took advantage of the pandemic, building up their savings and contributing more funds into their loan account. We know that 71% of our customers are ahead in their loan payments, which provides comfort around their ability to weather increases.

“We’re confident that our loan products remain competitive in the marketplace and will continue to allow us to provide our customers with the great services they’ve come to expect.”

Meanwhile, Freedom Lend has also been recognised in the category this year, placing second, thanks to its competitive basic and fixed-term loan offerings. The online lender currently has variable rates from 1.99%pa for loan-to-value ratios (LVRs) below 60% and 2.19%pa for LVRs below 80%.

Fellow non-bank lender Firstmac came in third this year after a strong showing across both variable and fixed loans. Right now, it’s offering variable home loan rates starting at 2.44%pa (for 24 months), then 2.84%pa afterwards for owner-occupiers with an LVR under 80%.

‘ Interest rates are rising and are expected to keep heading in that direction for the rest of 2022 and into 2023.