Lenders add whistles and bells to remain competitive

It’s not uncommon for lenders to increase their stable of products, reduce rates or even offer cash back incentives to appear more attractive to consumers.

Now online lender loans.com.au is in on the act, launching their value pack, which includes free property reports, financing planning and a conveyancing voucher with their home loan, which was named Australia’s cheapest in 2014 by Mozo.

The pack includes a 4.54% interest rate, with 4.56% comparison rate, a $150 conveyancing voucher, 100% offset facility, “Loan Tracker” service, $500 worth of financial planning and competitive home and contents insurance rates.

Kim Cannon, managing director of Firstmac, who are behind loans.com.au, said that the market has been flooded by borrower incentives in recent months, making it difficult to identify good value.

“The true cost or value of a home loan shows in the comparison rate, so borrowers should always look for the lowest interest rate and the comparison rate should be very close to the interest rate,” said Cannon.

Despite this, he doesn’t consider their new value pack to be a gimmick “like cash back that coincides with the date”.

“The value pack offers customers tangible benefits in a timely way, with property reports to help make the purchasing decision with confidence, discounts and vouchers to make conveyancing and insurance cheaper, Loan Tracker to streamline the application process, and financial planning to keep financial goals on track.”

Previously, Property Observer reported that six lenders have cash-back offers for home loan customers. These include NAB, Newcastle Permanent and Commonwealth Bank, which are all offering up to $1,000 cash back. Heritage Bank and Homeloans.com.au are offering $600 and Austral Mortgage is giving back $500. A further 11 offer to waive fees.