Loans.com.au launches new low-rate investment home loans

William Jolly By on September 23, 2019
 
loans Smart Investor Loan

Photo by Peyton Sickles on Unsplash

Leading fintech lender loans.com.au has today released two new investment home loan products: the Smart Investor home loans.

The Smart Investor loans both boast an interest rate of 3.39% p.a. (3.41% comparison rate*), and have no ongoing or monthly fees.

They are both full doc home loans available to investors who have a deposit of at least 20%, up to a maximum loan amount of $1 million.

The only difference between the two new products? One requires principal and interest (P&I) repayments and the other is interest-only (IO).

Despite this, the interest rate is the same for both products, which goes against the typical market practice of charging higher interest rates for IO borrowers.

When comparing similar home loans, loans.com.au’s Smart Investor loans have among the lowest interest rates on the investment home loan market.

Company Ad rate
p.a.
Comp rate*
p.a.
Monthly
repayments
 
Smart Investor Home Loan P&I 80% 3.39% 3.41% $1,772 More details
Low Rate Inv Loan w/Offset 3.40% 3.42% $1,774 More details
Achieve Var Inv P&I Special 3.49% 3.54% $1,793 More details
Inv Simplicity Plus P&I Special 3.66% 3.70% $1,850 More details
Ad rate
p.a.
Comp rate*
p.a.
Monthly
repayments
Smart Investor Home Loan P&I 80%
3.39% 3.41% $1,772
More details
Low Rate Inv Loan w/Offset
3.40% 3.42% $1,774
More details
Achieve Var Inv P&I Special
3.49% 3.54% $1,793
More details
Inv Simplicity Plus P&I Special
3.66% 3.70% $1,850
More details

Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) investment home loans with an LVR (loan-to-value) ratio of at least 80%. Introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term. *Rates correct as at 23 September 2019. View disclaimer.

Loans.com.au’s Managing Director Marie Mortimer said the launch of the new loans coincide with increased demand for investment home loans in Spring, as more people look to purchase investment properties or review their current debts this time of year.

“Property investors know that their investment is all about making money and our customers are on the ball when it comes to their rate, and getting a better deal from day one,” Ms Mortimer said.

“Our new loans offer much better value than the big banks so we think they will convince a lot of investors to look beyond their current bank to our offering and really help to drive competition in the market.”

Ms Mortimer also said the fact that the Smart Investor loan offers the same interest rate on both principal and interest and interest-only repayments breaks new ground in the industry.

“As a challenger lender, we have responded to what investors really want from their loans and heard loud and clear that they want to stop paying the ‘big bank premium’ on their investment loan,” Ms Mortimer said.

“Just in time for Spring, this is what we have delivered – two new loans, one P&I and one Interest-only, with a discount to reach a great low rate.”

Loans.com.au released the similarly named Smart Home Loan for owner-occupiers in March, which now has an interest rate starting at 3.03% p.a. (3.05% p.a. comparison rate*).

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 2018. They are (in descending order): Credit Union Australia, 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 2019) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.

Some providers’ products may not be available in all states.

In the interests of full disclosure, Savings.com.au 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 includes both the interest rate and the fees and charges relating to a loan, combined into a single percentage figure. The interest rate per annum is based on a loan credit of $150,000 and a loan term of 25 years.

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William Jolly
William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.
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