Best of both worlds?

Best of both worlds?

December 14, 2016

Written by Jason Cheetham

We all want the lowest possible interest rate on our mortgage and especially so when rates are as historically low as they are at the moment!

The problem is that there is no guarantee how long rates will be low and if they increase, will it happen slowly or quickly and how would that impact mortgage repayments? So many people are choosing to fix their loans or at least some of their borrowings whilst rates are at record low levels.

With fixing of interest rates comes some inflexibility with regards to additional repayments allowed and enabling offset to such loans. Most banks will let you pay up to $10,000 per year extra off a fixed rate loan but will not normally allow you a 100% offset account to be linked to the loan. So with rate certainty some flexibility is lost. To get around this many borrowers split their loan into part fixed and part variable to enable offset but this complicates things and can mean additional account keeping fees or annual package fees.

Do not fear though as there is a solution out there that provides you with both very competitive fixed rates, complete with 100% offset accounts and NO ongoing account management or offset account fees. In fact up until last week they had a market leading 2 years and 3 years fixed rate of 3.69% p.a., together with the full flexibility of 100% offset. This has since increased slightly to 3.74% fixed for 2 years and 3.84% fixed for 3 years, but still a great rate with repayment certainty and no ongoing fees.

The lender in question is one many of you would not have heard of, being Teachers Mutual Bank, who also now brings in the well-established local provider Unibank under their wings. Both offer the same suite of products and supply personal service and old fashioned values to their customers, which is something the bigger banks are not very good at!

They also have variable rates available from 3.79% p.a. with no ongoing fees and do not charge you a higher interest rate if you have a smaller deposit or lower equity, unlike most major lenders now. For first home owners they provide a loan term of up to 40 years to help make the repayments more affordable for new purchases, as well as lending up to 98% including mortgage insurance, more than most providers.

I’ve no doubt many of you would never have even considered such a lender as an alternative but that is our job as a mortgage broker, working in your best interests, to make such products available to you and to take some of the power away from the bigger banks who dominate the mortgage landscape.

If you’d like more information on Teacher’s Mutual / Unibank products or how much you might be able to save, drop us a line or an email and we can do some numbers for you.

Speak with us today