Mortgage of the Year

Reporter: Laticia Gibson

Today's announcement of a yet another potential interest rate hike has sent fear through Australian home owners. With the average home loan increasing from $300,000, in December last year to $317,000, this news could spell disaster for some already struggling with repayments. But there is some good news... mortgage rate competition is the fiercest its been in 15 years.

Nila Sweeney editor of 'Your Mortgage Magazine" has reviewed nearly 2,000 Australian mortgage products hunting out the best deals in the country, decreasing affordability prompting banks to win buyers back. "If you go back to your bank lender and say this is what I have from a non-bank, you will find that they are likely to consider and accommodate that" says Nila.

Comparing both bank and non bank lender packages - fixed and variable deals, each were assessed on their interest rates and associated costs like account keeping fees. For the third year running, RateBusters secured first place for the best non-bank standard variable deal.

"It is a win-win, absolutely, you get both of the things that you look for when you're looking for a home loan. Low cost, low rate and fantastic features." RateBusters General Manager Angela Cooney, attributes the institutions continuing success to their hand over the big banks who she says just can't match their savings. "They've got massive overheads, they've got profits that they've got to make for the shareholders, we don't have any of that."

"With the RateBusters loan I'm probably saving $2-300 a year, its fantastic." Having owned two properties previously, Julia Ross was scrupulous in her search for a lender. "I went through and chose probably three or four that I thought were the best ones then reviewed them a little more and this one was the one I chose to apply for."

By choosing RateBusters, Julia is able to directly deposit her salary into her off-set account every month, paying it off faster but still having access to her money as she needs. "It feels fantastic, because its great to know I've chosen well and I've got a really good mortgage that you know, is going to see me hopefully pay it off quicker than most" adds Julia.

Ratebusters took out top places for non-bank variable loan - first place with an interest rate of 6.9% and second at 7.17%. Australian Mortgage options in third place at 7.21%.


3. Australian Mortgage Options: 7.21%

2. Ratebusters: 7.17%

1. Ratebusters: 6.90%


3. Westpac Variable: 8.07%

2. Adelaide Bank: 7.3%

1. Macquarie Mortgages: 7.39%

But a warning before you contemplate a switch of lender - some banks can charge you around $3000 as an exit fee. "Do the research yourself. It's easy to do if you know where to look and get the right advice and talk to experts" advises Angela.