Online lender Easy Street has ditched the typical practice of charging investors higher home loan rates than owner-occupiers.
The Community First Credit Union subsidiary has simplified its pricing structure for both fixed and variable loans, except those associated with current or previous specials.
The new structure means there will be just one rate for each fixed loan and one rate for the standard variable loan, regardless of whether the borrower is an investor or residential buyer.
The interest rates are also the same for both principal and interest (P&I) repayments and interest-only (IO) repayments.
Easy Street has an everyday variable rate of 3.75% p.a. (3.79% comparison rate*) with a 100% offset account available.
It has one-year fixed rates from 2.29% p.a. (3.66% p.a. comparison rate) and two-year fixed rates from 2.29% p.a. (3.53% p.a. comparison rate).
Chief executive of Community First Credit Union John Tancevski said the change "demonstrated Easy Street's long standing reputation for offering banking value and simplicity".
"We’re about making banking simpler and easier for people by removing some pricing complexity," Mr Tancevski said.
"As a bonus, investors can now access highly competitive pricing, unlocking more savings.”
Buying an investment property or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for investors.
Lender | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Variable | More details | ||||||||||||
| FEATUREDGREAT INTEREST RATE | Smart Booster Investor Bundle (Principal and Interest)
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Smart Booster Investor Bundle (Principal and Interest)
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| Variable | More details | ||||||||||||
| FEATUREDGET APPROVED FASTER WITH A DIGITAL APPLICATION | Neat Variable Investment Loan (Principal and Interest) (LVR < 60%)
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Neat Variable Investment Loan (Principal and Interest) (LVR < 60%)
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| Variable | More details | ||||||||||||
| BUNDLE YOUR HOME LOAN AND YOUR INVESTMENT LOAN FOR MORE SAVINGS | Yard Investor Bundle Loan (Bundled with Home Loan)
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Yard Investor Bundle Loan (Bundled with Home Loan)
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| Variable | More details | ||||||||||||
| 100% FULL OFFSET ACCOUNT | Ocean Investment (Amounts < $1m, LVR < 60%)
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Ocean Investment (Amounts < $1m, LVR < 60%)
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- Option to add an offset for 0.10%
- No monthly or ongoing fees
- Unlimited redraws
Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of May 25, 2022. View disclaimer.
The new pricing structure won't apply to Easy Street's current special variable rate of 1.95% p.a. (1.99% p.a. comparison rate) on loans of $750,000 and above.
Although pricing for interest-only repayments would be the same, the lender noted that there would still be restrictions on maximum interest-only terms, with Easy Street's usual assessment criteria utilised as part of the loan approval process.
"Our new rates bring all our interest rates back into alignment whether it’s for investors, owner-occupiers and whether they choose to make repayments on a P&I or interest-only basis,” Mr Tancevski said.
Support for returning investors
Data from the Australian Bureau of Statistics (ABS) showed new loan commitments for investors rose 2.1% in April to $8.1 billion, the highest level since mid-2017.
This is the latest evidence to suggest investors are returning to the market in droves after a noticeable dip in investor lending last year.
CoreLogic head of research Tim Lawless said the increased investor activity would further increase house prices, potentially leading to regulators stepping in next year.
"A slowdown in dwelling price appreciation is expected as affordability constraints progressively impact market participation, and potentially tighter credit policies looms further down the track," Mr Lawless said.
Mr Tancevski said part of the decision to alter Easy Street's new pricing structure was made in response to changing property market conditions.
“With investors returning to property markets around Australia, Easy Street’s new pricing structure in the interest-only space for investors will be highly competitive as we will be below almost all of our competitors' pricing," he said.
“Having the same rates for investors and owner-occupiers is unique in the mortgage industry in Australia and means we won’t charge you more if you fall into one category or the other."
Photo by Priscilla Du Preez on Unsplash
