The Royal Automobile Club of Queensland (RACQ) was formed in 1905 at a meeting of almost all the motorists in Brisbane at the time - 18 people to be exact.
Many years later, RACQ is Queensland's largest club by membership and a mutual organisation that provides many services and products to its members, covering roadside assistance, insurance, travel, and - as of 2017 - banking.
RACQ Bank was formed with a merger of Queensland Teachers Mutual Bank which started out as the Queensland Teachers Credit Union in 1965. As a mutual bank, RACQ Bank reinvests its profits back into its operations in a bid to provide "fairer banking alternatives" for its members. It offers the full range of banking services, including home loans.
RACQ Bank home loan products
RACQ Bank caters for both owner occupiers and investors with the usual options of variable- or fixed-rate loans and principal and interest (P&I) or interest-only (IO) repayments.
Its products include:
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Fair Dinkum Home Loan (its lowest-rate home loan without a redraw facility or offset account)
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Mortgage Saver (variable-rate home loan with redraw)
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Mortgage Breaker (variable-rate home loan with redraw and offset)
RACQ Bank loan features
All RACQ Bank home loans come with:
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no annual or monthly fees
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a split loan option (but not during a fixed-rate term)
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up to 40-year home terms for first home buyers (up to 30 years for other borrowers)
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availability of 5% deposit option for eligible borrowers
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a maximum loan-to-value ratio (LVR) of 95% for eligible borrowers (excluding lenders mortgage insurance (LMI) and government fees and charges)
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option of including LMI in the loan amount for eligible borrowers
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unlimited additional payments (except when the loan is on a fixed rate when maximum extra repayments are capped at $10,000 a year)
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loan top-up availability
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RACQ membership and eligibility for member discounts
RACQ Bank loan fees
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Fair Dinkum loans come with no document preparation and loan settlement fees
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$550 document preparation and loan settlement fees for Mortgage Saver, Mortgage Breaker, and fixed home loans
See also: Navigating home loan fees
RACQ Bank home loans interest rates
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.39% p.a. | 5.40% p.a. | $2,805 | Principal & Interest | Variable | $0 | $550 | 60% | |||||||||||||
5.49% p.a. | 5.50% p.a. | $2,836 | Principal & Interest | Variable | $0 | $550 | 70% | |||||||||||||
5.54% p.a. | 5.55% p.a. | $2,852 | Principal & Interest | Variable | $0 | $550 | 80% | |||||||||||||
5.59% p.a. | 5.60% p.a. | $2,867 | Principal & Interest | Variable | $0 | $550 | 60% | |||||||||||||
5.59% p.a. | 5.63% p.a. | $2,867 | Principal & Interest | Variable | $0 | $550 | 60% | |||||||||||||
5.64% p.a. | 5.68% p.a. | $2,883 | Principal & Interest | Variable | $0 | $550 | 80% | |||||||||||||
5.69% p.a. | 5.73% p.a. | $2,899 | Principal & Interest | Variable | $0 | $550 | 70% | |||||||||||||
5.69% p.a. | 5.70% p.a. | $2,899 | Principal & Interest | Variable | $0 | $550 | 70% | |||||||||||||
5.69% p.a. | 5.70% p.a. | $2,899 | Principal & Interest | Variable | $0 | $550 | 90% | |||||||||||||
5.69% p.a. | 5.73% p.a. | $2,899 | Principal & Interest | Variable | $0 | $550 | 70% |
RACQ's chief executive of banking Barney Burke said RACQ Bank strives to keep its home loan interest rates competitive.
"We know Queenslanders are not only feeling the pinch of cost-of-living pressures but are finding it difficult to achieve the goal of home ownership in the face of high property prices," Mr Burke told Savings.com.au.
"At RACQ Bank, we are committed to supporting prospective buyers in any way we can by offering competitive interest rates across a range of home loan products."
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Barney Burke, RACQ chief executive of banking
RACQ Bank also offers a number of flexible loan terms aimed at helping first home buyers enter the market sooner.
"Extended loan terms of up to 40 years, 95% loan-to-value Ratio, the option to include Lenders Mortgage Insurance [LMI] in the loan value, and no establishment or monthly fees are some of the options available for eligible first-time buyers," Mr Burke said.
Who can take out an RACQ Bank home loan?
While most RACQ Bank borrowers are from Queensland, being from outside the state or buying a property beyond the state borders may not necessarily discount you from taking out an RACQ Bank home loan. Applications can be considered on a case-by-case basis.
As well, anyone taking out an RACQ Bank loan will automatically become an RACQ member gaining access to a range of benefits including discounts on fuel, holidays, and shopping through the organisation's Member Benefits platform.
RACQ Home Loans - pros and cons
Pros
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Can borrow up to 95% LVR
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Competitive interest rates
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Relatively low fees
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Provisions for first homebuyers
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40-year home loan terms available for some borrowers
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Option of including LMI in the loan amount
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Variable, fixed, and split loan options
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Flexible repayments
Cons
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Geographical limits to Queensland in most circumstances
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Does not offer guarantor loans
RACQ Bank home loans - Broker review
Astute Financial Management head of sales Nathan Kerr said RACQ is a strong, highly trusted Queensland brand.
Although RACQ Bank is a small bank, it has good, solid lending products, strong pricing, and has the option of a 40-year home loan that not many other lenders offer," he told Savings.com.au.
"As a smaller lender, it is perhaps better at dealing with more straightforward, non-complicated applications.
While its lending is pretty much restricted to Queensland, it can be a competitive option for homebuyers in the state with its well-priced interest rates."
Nathan Kerr, Head of Sales, Astute Financial Management
Main article image by Paddy Pohlod via Unsplash
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