Easy Street gives investors and owner-occupiers the same home loan rates

author-avatar By on June 10, 2021
Easy Street gives investors and owner-occupiers the same home loan rates

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.

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) investment home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term.

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

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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Alex joined Savings.com.au in 2019. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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