Yard: The online lender measuring up to the big banks

author-avatar By on July 15, 2021
Yard: The online lender measuring up to the big banks

Offering some of the sharpest home loan interest rates on the market, Yard has gone from strength to strength since its 2017 inception.

Founded by management consulting expert Toni Mladenova and finance expert Nathan Gooley, the online lender was formed as the pair recognised there weren’t many lenders offering an efficient digital home loan process.

“We believed that there was a really big opportunity within this sector to not only reinvent the customer journey but also deliver a very competitive interest rate and low-fee offering into the market,” Mr Gooley told Savings.com.au.

The emergence of fintechs and neobanks has brought with it many new wild and whacky names, often missing vowels for dramatic effect.

Yard went for a more simple approach.

“Buying a property is such a big aspiration for Australians historically and it continues to be a major life and financial goal, even for the younger generations,” Ms Mladenova told Savings.com.au.

“When we thought about Yard, the whole idea was it's really inspirational that we're going to help you actually buy a yard, your own backyard, and that's where the name came from.

“It’s also pretty tough getting to the point where you’ve got enough cash saved up to buy property, so it also refers to the hard yards people put in when going through the property buying journey.”


Why borrow with Yard?

Yard boasts some of the most competitive home loan interest rates on the market, with variable and fixed options available, as well as bridging loans, construction loans, and SMSF loans.

It offers 100% offset accounts for an annual fee of $120, unlimited redraw facilities, free of charge, and unlimited additional repayments for variable loans.

It doesn’t charge any application fees, and has loan amounts ranging from $150,000 to $5 million.

Ms Mladenova said Yard differentiates itself from other lenders through three main points.

“Our first point of difference is we seek to provide a very competitive rate to homeowners and investors,” she said.

“Secondly, we separate ourselves through the breadth and speed of our proposition. For example, we can help borrowers with renovations or to purchase a property before they’ve sold their current property through bridging finance. And we can typically approve applications in 24 to 48 hours.

“Lastly, we’ve tried to provide a frictionless digital experience, but at the same time recognised obtaining a home loan is the biggest financial decision someone makes in their lives, so we have a model where we provide dedicated service from the point of initial customer inquiry all the way to settlement.”


How does Yard offer competitive rates?

At the time of writing, Yard has a variable rate home loan starting with a one, and comparison rates only marginally higher than the advertised rate, which is indicative of a product with low fees.

Being an online lender, Yard has no brick and mortar branches, which Ms Mladenova said allowed them to have a fundamentally different cost structure. But she noted Yard’s low rates were more than a gimmick.

“It comes down to the values of the organisation, where we’re very committed to actually passing on savings the business makes to customers.”

“We offer a very simple proposition. What we try to do is really simplify our loans, and we would like to think that brings transparency into the proposition, and makes our products very easy to compare with other products in the market.”

For borrowers with reservations about not being able to physically go somewhere to discuss their home loan with someone, Ms Mladenova urged them to consider the advantages of an online lender.

“Obviously the first thing that comes to mind is the convenience. You don’t have to leave home or walk to come and apply for a home loan or make an enquiry - you can do that 24/7 while sitting on your couch at home,” she said.

“You’re also likely to get a better deal when going with an online lender, as most of the competitive rates on the market currently come from an online lender.”

Online lenders like Athena, UBank, loans.com.au, Tic:Toc, and now Yard, offer some of the sharpest rates on the market since the Reserve Bank took Australia’s cash rate to its lowest ever level of 0.10% in November 2020.

Many larger lenders like the big four have since increased rates in recent months, due to various wholesale funding factors, despite the central bank maintaining its 2024 guidance on increasing the cash rate.


Expansion on the horizon

Not content with its successful foray into the home loan market jungle, Ms Mladenova said Yard was keen to go the ‘whole nine yards’ and expand into car and personal loans.

“Our aspiration and ambition is to become a full-service credit provider, which is obviously evidenced by the breadth of the current credit policy we have in relation to home loans,” she said.

“So expanding our proposition is absolutely on our short to medium road map.”

If you’re looking for greener pastures and want to buy a home with Yard’s assistance, you can apply via its website.


Photo by Martin Knize 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 as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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