Your Mortgage 101

Buying Investing Managing BorrowingSeptember 2010 No.101 $9.95 (GST incl.) www.yourmortgage.com.au

18th annual mortgage of the year awards

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Your Mortgage No.101 September 201016

Australia’s Best Home Loans • Mortgage of the Year Awards 2010

www.yourmortgage.com.au 17

Smart mortgages with the cheapest rates and flexible features dominate this year’s competition. But which home loan reigned supreme in the 18th annual Your Mortgage magazine’s Mortgage of the Year Awards?

Welcome to the 2010 Your Mortgage magazine Mortgage of the Year Awards.

This year has been exceptional in more ways than one. First, the competition has well and truly returned to the mortgage market with the non-bank lenders emerging from their self-imposed hibernation, ready to regain their lost market share.

With the global financial crisis helping weed out the weak players in the market, those that have weathered the storm came out stronger and are now primed for action.

Of course, the banks who enjoyed almost no competition over the past 18 months are not about to give back their hard-earned market shares. They are just as aggressive as the non-banks in terms of pricing their offering.





Mortgage of the Year This award is given to the best overall product in Scenario 2 (that is, second homebuyer), providing it has a variable interest rate, is an owner-occupier home loan, is widely available in more than two states or territories, the lender is well established and of substantial size, and the product has a significant market presence.

Best loan for first hoMeBuYers This award is given to the best overall product in Scenario 1 (that is, first homebuyers), providing it has a variable interest rate, is an owner-occupier home loan, is available in more than two states or territories, the lender is well established and of substantial size, and the product has a significant market presence.

Best loan for investors This award is presented to the best overall product in Scenario 3 (that is, investors), provided it has a variable interest rate, is an owner-occupier home loan, is available in more than two states or territories, the lender is well established and of substantial size, and the product has a significant market presence.

Best new Product The Best New Product is awarded for new products, or new features on existing products. Our panel of experts looked at a range of criteria, including originality, marketability, and whether the product fills a niche or ‘problem area’ in the market and does so in an untried or unique way.

Best Bank, non-Bank lender, Building societY/credit union of the Year award Lending institutions offering the broadest, most competitive and most transparent home loan products and have won the most gold, silver and bronze medals, were awarded the Best Bank, Best Non-Bank Lender and Best Building Society/Credit Union of the Year Awards.

Interest ratesThe rates listed in the awards tables are taken from the information in our database as at 14 May 2010. It should be taken into consideration that interest rates, particularly those in the fixed categories, can change even without movement in the RBA base rate.

Loan criteriaAll Mortgage of the Year Awards are offered to residential mortgages only (ie loans for owner-occupied or residential investment houses and units) and a loan must be widely accessible to the general public to be eligible. Any loans that required a borrower to belong to a particular group or organisation were also ineligible. Features that could be accessed only through one particular method, such as internet transfers, did not have any points awarded to them.

Loans were also excluded if they did not fill our qualifying conditions. If, for example, discounts only applied when additional expenses were incurred by the borrower, the interest rate reductions were not included in our calculations.

We also did not include bonus programs or giveaways when allocating points. For example, borrowers who took out a loan with certain lenders could qualify for extra frequent flyer points or a free holiday.

As such bonuses were not directly related to the value of the product, we did not consider such offers when awarding points.

Our awards focused solely on the loan product, and did not take into consideration any offers such as free transactions or savings accounts.

The true cost of loansA key component of the judging criteria is the mortgage comparison rate (MCR). The MCR expresses, as closely as possible, the ‘true’ cost of a loan by including all measurable fees into an annual interest rate, with the exception of government and statutory fees.

The MCR incorporates the basic interest rate with all fees charged by the lender necessary to establish and maintain the loan.

The MCR was then multiplied by 100 (MCR x 100) to provide a base figure. From the base figure, points were deducted for any additional features such as redraw, access, offset accounts and portability. The lower the score (ie the cheaper the loan with more features), the better.

Disclaimer: Interest rates, roll rates and comparison rates are correct as at 14 May 2010. Comparison rates have been taken for home loans $250,000 at 25 years unless indicated otherwise

the awardsThis means that this year’s competition has been one of

the tightest we’ve seen in a while. A record number of entries, offering some of the cheapest and most f lexible mortgage products, vied for the top prize – which is good news for borrowers who are in the market for a mortgage.

The mind-blowing gains in the property market, another remarkable feature this year, is also a catalyst for this renewed competitive vigour among lenders. As buyers return to the market, lenders are in overdrive to win their business.

Now, with borrowers firmly back in the driver’s seat, competition will no doubt continue.

At the current level of interest rates and property prices, borrowers are in an enviable position to begin the path to homeownership and enjoy great home loan products and low interest rates.

Buying a home is never easy but we hope these awards will make choosing the best loan for you a more enjoyable experience.

Over the following pages we proudly present to you Australia’s top mortgage products. We looked at every aspect of each loan in order to impartially judge the best loans for new homebuyers, second homebuyers and first-time investors. Approximately 1,000 mortgage products in our database have been carefully vetted using a wide range of criteria to ensure you are getting the best value home loan.

The awardsTo be eligible for the awards, products must be available in two or more states of Australia. For the purposes of the awards, institutions are divided into three groups:• Banks• Non-banklenders• Buildingsocieties/creditunions

Product categoriesThis year, Your Mortgage looked at the most popular loan categories currently available in the marketplace. These were divided between bank, non-bank lender and building society/credit union products and include:1.BestStandardVariableLoan2.BestBasicVariableLoan3.Best3-YearFixedLoan4.Best5-YearFixedLoan5.BestIntroductoryLoan

owner-occuPied loans investor loans

Scenario 1First homebuyer

Scenario 2Upgrader

Scenario 3First-time investor

Available deposit/equity

$30,000 $100,000 $60,000

Amount borrowed

$250,000 $300,000 $250,000

Home/unit price $280,000 $400,000 $300,000

Loan to value ratio

90% 75% 80%

Payment frequency

Monthly Monthly Monthly

Length of loan 25 years 20 years 15 years

6.BestLow-DocLoan7.BestLineofCreditLoan8.BestNewProduct(onlyoneproductwins)

Medal categoriesGold, silver and bronze medals were awarded to institutions for all categories based on the three scenarios outlined below (except for line of credit). These scenarios effectively sum up the major mortgage market sectors.

SCENARIO 1 FirsthomebuyerA couple struggling to buy their first home. They can only afford a small mortgage for an inexpensive house in a major city.

SCENARIO 2 SecondhomebuyerThese upgrading mortgage shoppers have a relatively high combined income (or an even higher single income) and a healthy deposit.

SCENARIO 3 First-timeinvestorAnyone with at least a partially paid-off first home who is in a position to buy an investment unit.

The table below outlines the characteristics of the borrowers in each scenario and shows the criteria on which the calculations were based. Note: the available deposit does not include the money saved for disbursements such as stamp duty.





The Ratebusters Fightback Premium product smashed the competition and took out the most coveted and most prestigious mortgage award in Australia – Your Mortgage magazine’s Mortgage of the Year Award for 2010.

A potent combination of ultra-low interest rate and overall low costs helped Ratebusters Fightback Premium secure the top spot.

The loan has no application fee and no annual and monthly ongoing fees.

In addition to the cheap rates, the Ratebusters product also carries the full suite of flexible features, including 100% offset, which can be used to pay off your mortgage faster by parking all your money in a linked account.

The winning product also offers the ability to make unlimited free repayments and the ability to access these funds at a later date should the need arise.

The Ratebusters Fightback Premium’s interest rate of 6.43% is about 1% cheaper than most banks’ offerings.

The Fightback Premium allows borrowers to split the loan up to four different ways. The loan is also portable, so you can take it with you should you sell the property and buy another one.

The product can be accessed in multiple ways including phone, internet and ATM.

Ratebusters has also enforced some restrictions on the product to help shield Fightback Premium borrowers against volatile economic conditions. Borrowers must have a 20% deposit and can only borrow up to $750,000 per property.

No credit card is included with the loan, but borrowers have access to a Visa debit card.

Another factor that helped propel the loan to the top spot is Ratebusters’ customer service and transparency. The Ratebusters website discloses all the fees that may be charged when taking this mortgage, which is really crucial when comparing different home loans. Ratebusters is one of the rare breed of non-bank lenders who are upfront with their lending conditions and fees they charge to customers. The lender also employs 15 full-time staff to accommodate borrowers’ queries and needs.

Ratebusters has a long track record of offering some of the most competitive mortgage products in Australia. The lender has won Mortgage of the Year Awards in 2005, 2006, 2007, and the latest – 2010.

Mortgage of the Year

Ratebusters Fightback Premium

Winning features• Competitive comparison rate

of 6.45%• Low interest rate of 6.43%• Ability to make unlimited

additional repayments• Free redraws (maximum of

$5,000 when transaction is done online)

• 100% offset• Portable• Loan can be split• Allows direct salary crediting• Ability to switch variable rate

to fixed rate• Maximum loan to value

ratio: 80%





HomeStar clinched the tightly-fought Non-Bank Lender of the Year Award for the second year running, by amassing a hugely impressive tally of three gold awards, one silver and two bronze in this year’s Your Mortgage magazine Mortgage of the Year Awards.

HomeStar’s Rate Stopper put in a particularly outstanding performance, picking up a gold award in the Best New Product category and silver in the Best Introductory Loan category. HomeStar’s fixed rate products also performed very well, with the HomeStar 5-Year Fixed Rate Loan picking up gold, boosted by its competitive comparison rate and flexible features. The 3-Year Fixed Rate Loan wasn’t far behind, taking the bronze award in this category.

One of the biggest competitive advantages of HomeStar products is their zero upfront costs. This means borrowers are not hit with massive costs that could amount to several hundreds to thousands of dollars right at the start.

By not charging these hefty fees, refinancing from other lenders would be a lot easier and more attractive.

Another strong aspect of HomeStar’s loan offering is the transparency of their products’ fees, interest rates and features. This makes it a lot easier to do a meaningful comparison of the available products in the marketplace.

Of course, all the winning loans offer a range of flexible features including the ability to make free additional repayments and direct salary crediting. This allows customers to pay their entire income into the loan account to help to reduce repayments. All the loans except the fixed rate range offer redraw facilities as well as the ability to transfer the loan to a new property as security.

Customers can get hold of their money by a range of means, including phone, BPAY and internet banking.

The wide spread of top-performing products all added up to a non-bank lender that can be counted on to offer some of the best rates and lowest overall cost, no matter what product you are after.

Non-Bank Lender of the Year

HomeStar

a multi-aWard Winner

Best New Product

Best Lender Website

Best 5-Year Fixed Loan

Best Introductory Loan

Best Line of Credit Loan






CUA took the gold medal for the Best Building Society/Credit Union in this year’s competition, boosted by a wide range of competitive products.

Along with two gold medals, CUA also grabbed a bronze medal for its three-year fixed loan.

CUA’s introductory loan in particular has one of the lowest comparison rates in this category, at 6.86%. The CUA introductory loan also has a generous loan to value ratio (LVR) – the amount you can borrow against the value of the property is 97% with lenders mortgage insurance.

The loan has a 100% offset facility so borrowers can deposit all their income in this linked account. The other flexible features include the ability to make free extra deposits and free redraws. The loan is also portable with a $500 activation fee.

CUA’s five-year fixed rate loan also smashed the competition thanks to its competitive comparison rate of just 7.42%, one of the lowest among the other products from building societies and credit unions in this category. Borrowers of the loan also enjoy some degree of flexibility including the ability to make extra repayments and redraw.

Building Society/Credit Union of the Year

CUA

Finally, CUA’s three-year fixed rate loan also scored well in this year’s awards, helped by a competitive comparison rate of just 7.12%. Its initial interest rate of 7.59%, which reverts to 6.87% after the fixed period, is among the cheapest in this category.

Like its five-year fixed rate product, the three-year fixed has a range of flexible features including the ability to pay extra repayments during the fixed period and to redraw it at a later time. This gives borrowers the best of both worlds – the peace of mind that comes with having a stable repayment each month and the flexibility of making additional repayments that will help reduce the loan and slash the loan term dramatically.

These top-performing products all added up to a credit union that can be counted on to offer some of the most competitive interest rates in addition to being transparent and offering quality service to its borrowers.

NAB has won Bank of the Year in this year’s Your Mortgage magazine Mortgage of the Year Awards by a small margin against stiff competition from Commonwealth Bank and AMP Banking.

NAB gained a slim advantage over the others by taking the gold medal for its three-year fixed loan and line of credit product. The NAB five-year fixed rate loan finally sealed the deal by winning the silver award.

Another reason why NAB outranked the competition was due to its competitive products which have attracted strong interest from borrowers. NAB has also broken ranks with the other big lenders by matching the interest rate increases made by the Reserve Bank of Australia, even as the others have rushed in to pile extra rate increases on top of the RBA’s move.

This astute move resulted in cheaper and more competitive loan products. By keeping its mortgage interest rate lower than the other big banks despite pressure from the bank’s investors and shareholders, NAB is sending a positive message to borrowers that despite the ongoing credit squeeze, there are lenders who are willing to innovate and compete.

Against the backdrop of rising funding costs, this is a remarkable achievement.

NAB’s Home Equity Line of Credit Loan in particular has won the 2008 Best Line of Credit Award and has also been a consistent winner in Your Mortgage magazine’s Editor’s Choice and Best Value Mortgage Awards.

NAB’s Fixed Rate Loans rated highly as well, thanks to their competitive interest rates and flexible features. Both the Choice Package Fixed Rate 3-Year >$250k, which won the gold medal for the Best 3-Year Fixed Rate Loan, and the Tailored Home Loan Fixed Rate 5 Year – silver award winner for the 5-Year Fixed category – allow additional extra repayments and redraw. These features enable borrowers some flexibility to pay off their loan fast as well as the stability and peace of mind of having a fixed rate.

Bank of the Year

NAB

three podium finishes


Best Line of Credit Loan


a multi-aWard Winner

Best Introductory Loan







State Custodians fended off stiff competition to bag this year’s Best Loan for First Homebuyers award – a feat that’s all the more impressive when you consider that bank, non-bank, building society and credit union products were eligible for the award.

In this scenario our first homebuyer had a $30,000 deposit, and was looking to borrow $250,000 to purchase a $280,000 house. Our hypothetical first homebuyer was going in search of a 25-year mortgage, and wanted to make repayments on a monthly basis.

The State Custodians SCMC Standard Variable Loan took first place thanks largely to its low rate of 6.39%, which has an equally low comparison rate of 6.49% due to its low upfront costs.

Other features that contributed to State Custodians’ win were a high LVR of 95% with lenders mortgage insurance, portability or the ability to transfer the loan to a new home, and the ability to split the loan four different ways at no extra cost. Borrowers are allowed to switch their loan to a fixed rate for a $395 fee. The SCMC Standard Variable Loan also comes with a $345 annual fee.

The State Custodians’ SCMC Standard Variable Loan also scored highly for being an all-in-one account that allows customers to put their salary into the loan account, and make withdrawals as required. Extra points were on offer for allowing unlimited withdrawals per month and, as it allows customers to make an unlimited amount of fee-free withdrawals each month, State Custodians’ product qualified for these points with ease.

The loan offers multiple access points including over the internet, BPAY, mail ATM, EFTPOS and over the phone.

The State Custodians SCMC Standard Variable Loan also won the prestigious Mortgage of the Year award in 2008.

Best Loan for First Homebuyers

State Custodians Mortgage Company SCMC Standard Variable Loan

Winning features• Very competitive interest rate of

6.39%; after five years a 0.2% loyalty bonus kicks in

• Low comparison rate of 6.49% • Maximum LVR of 95% with

mortgage insurance• Maximum LVR of 90% without

mortgage insurance• Offset facility that can act as an

all-in-one account• Free unlimited extra repayments • Free redraws• No application fee/settlement

fee/mortgage preparation fee





Winning features• Interest rate of 6.41% • Maximum LVR of 90% with

mortgage insurance• Maximum LVR of 80%

without mortgage insurance• Unlimited free extra repayments• Free redraws• No mortgage preparation/

settlement fees

PMP has won the Best Loan for Investors in this year’s competition thanks to its very competitive interest rate of just 6.41% as at 14 May 2010, as well as its low upfront costs.

As a result, the PMP Advantage Home Loan has a very low competitive comparison rate of 6.42%.

Open to banks, non-banks, building societies and credit unions, this category was dominated by the latter, ultimately providing the lowest rates and minimal fees. And with property investors currently leading the property market activity, the investor market has become a major target for lenders.

For this award, we aimed at a scenario where a buyer had partially paid off their first home and were in a position to buy an investment property.

Out first-time investor had $60,000 in available deposit including equity and was looking to borrow $250,000 to purchase a $300,000 unit. Our hypothetical first-time investor was going in search of a 15-year mortgage, and wanted to make repayments on a monthly basis.

The PMP Advantage Home Loan boasts a very competitive feature – free portability. It means borrowers can easily transfer the loan to another property as security without cost. Most lenders charge a fee to activate this feature. PMP also offers a split facility for free in addition to providing unlimited free extra repayments and redraws. The loan can be accessed via the internet, ATM, EFTPOS and cheque.

The loan also picked up extra points for not charging an ongoing fee, nil mortgage application and mortgage settlement fees, and free mortgage preparation.

Best Loan for Investors

Professional Mortgage Providers PMP Advantage Home Loan





Winning features• Interest rate discount of around

0.30% from the bank’s SVR for the first two years

• Current interest rate of 7.04%, capped at 7.54% for two years

• Comparison rate: 6.80%• Maximum LVR of 80% without

mortgage insurance• Unlimited extra repayments• No upfront costs such as

application, mortgage settlement and mortgage establishment fees

HomeStar’s latest offering, the Rate Stopper Loan, has come at an opportune time when rates are rising and borrowers are looking desperately for cheaper mortgages. With many economists predicting mortgage interest rates to peak at 9% or higher in 2011, the Rate Stopper Loan offers a safety net for the risk-averse homeowner.

The Rate Stopper is designed to offer the best of both worlds: the flexibility of a standard variable loan and the security that the interest rate will not rise past the capped rate of 7.54% during the first 24 months. The Rate Stopper Loan carries an initial interest rate of 7.04% – about 0.30% lower than the banks’ standard variable offerings. After 24 months, the interest rate reverts to an even lower rate of 6.64%.

The Rate Stopper also provides an added benefit of a reduced interest rate should the RBA decide to slash the official cash rate.

Borrowers can enjoy all the flexible features such as the ability to make free unlimited extra repayments and to access these excess funds at no costs. The Rate Stopper Loan allows up to four splits for free and the ability to switch to fixed without any fee as well.

On top of the attractive interest rates and flexible features, the Rate Stopper does not charge upfront costs such as application, mortgage settlement or establishment fees. This makes the product even more competitive and attractive.

Upfront costs have been one of the major hurdles preventing borrowers from switching loans to another lender. By removing this obstacle, borrowers can utilise a cheap loan with flexible features without having to worry about paying a hefty upfront cost when refinancing from a different lender.

Best New Product

HomeStar Rate Stopper





Ratebusters’ Fightback Premium trumped the competition in this hotly contested segment of the market by taking the top spot as Best Standard Variable Loan offered by a non-bank.

The Ratebusters Fightback Premium loan offers one of the lowest interest rates at just 6.43% and a similarly low comparison rate of 6.45%.

Borrowers of Ratebusters’ Fightback Premium can borrow up to a maximum of 80% LVR, to $750,000. Lenders mortgage insurance is mandatory for 80% LVR loans, but this premium is paid for by Ratebusters. Customers can make unlimited extra repayments and redraws from the 100% offset and also switch their home loan to a fixed rate at any time.

The product allows direct salary crediting and the choice of making principal & interest or interest-only repayments. The product also has no application fee and no ongoing monthly and annual fees.

The Fightback Premium offers a range of flexible features to complement the cheap interest rate and comparison rate.

As well as the 100% offset, borrowers enjoy unlimited free internet, phone, EFTPOS, BPAY, direct debit and cheque transactions. Five free ATM transactions a month are allowed via Westpac, St.George, BankSA or CueCard’s ATMs.

Due to its bargain interest rate and low costs, Ratebusters does impose an exit fee ranging from 1.2% of the original loan amount to 2% if you pay off your mortgage within five years.

Another Ratebusters product, Maxi 90, took the silver medal for Best Standard Variable Loan for non-banks this year. The loan carries the same interest rate and comparison rate as the Fightback Premium. It also has the same flexible features. The difference lies in the loan to value ratio which is from 80% to 90% of the loan amount. As such, lenders mortgage insurance is mandatory for all loans and is payable by the borrower. The loan does not offer an interest-only option so borrowers need to pay principal & interest from day one.

Bronze winner, State Custodians Mortgage Company’s Standard Variable Home Loan, also carries a competitive comparison rate of 6.48% and a very low headline interest rate of 6.39%. The SCMC Standard Variable also allows borrowers to make extra repayments, redraws, loan splits and switch to a fixed rate. The SCMC Standard Variable Home Loan was previously a winner in Your Mortgage magazine Mortgage of the Year Awards in 2008.

Best Standard Variable – Non-Bank


Winning features• Competitive 6.45%

comparison rate• Low interest rate of 6.43%• Ability to make unlimited

additional repayments• Free redraws (maximum of

$5,000 for online transactions)• 100% offset• Portable• Split facility – up to four

splits available• Allows direct salary crediting

Winners


Ratebusters Maxi 90

State Custodians Mortgage Company SCMC Standard Variable Home Loan

• Ability to switch variable rate to fixed rate

• Maximum LVR: 80%





Commonwealth Bank’s Standard Variable loan under the Wealth Package scooped up the gold medal for the Best Standard Variable product offered by a bank, thanks to its flexible features and low comparison rate of just 6.83%.

Commonwealth Bank also picked up the bronze medal in the Standard Variable category with its Economiser Home Loan. Between the two Commonwealth Bank products was silver medallist St.George Bank with its Advantage Package Standard Variable Loan ($250k+).

Commonwealth Bank’s Standard Variable loan (under Wealth Package) offers a wide range of flexible features including the ability to make unlimited extra repayments at no cost, and a free redraw facility with no minimum and maximum redraw amount required.

The loan allows direct salary crediting as well as portability and the ability to combine it with other loan types. The maximum loan to value ratio (LVR) allowed is 95% of the value of the property.

The mecu Premium First Home Buyers Loan took the top spot for the Best Standard Variable Loan for building society/credit union category, boosted by its ultra-low interest rate and comparison rate of just 6.59%, based on a $250,000 loan as at 14 May 2010.

Another mecu product, the Premium Home Loan $250k–500k, took the silver medal while CUA’s Standard Variable loan claimed the bronze.

mecu’s Premium First Home Buyers Loan carries the lowest interest rate and comparison rate for the building society and credit union category. The product also boasts a range of flexible features including full offset, free unlimited extra repayments and a redraw facility.

Borrowers can take up to a maximum of 95% loan to value ratio with lenders mortgage insurance, and up to 80% without LMI. The loan can be accessed over the counter, via phone and internet as well as via BPAY and giroPost.

The flexibility of the product is further enhanced by allowing borrowers to switch to a fixed rate, as well as the ability to pay salary directly into the mortgage.

Borrowers of the winning product can also choose to take advantage of the 100% offset feature on offer. This feature allows homebuyers or investors to deposit their entire income into the loan account and use it as a day-to-day transaction account.

Silver medallist St.George Bank’s Advantage Package Standard Variable Loan also carries a competitive comparison rate of 6.92% and a headline interest rate of 6.73%. Borrowers can enjoy flexible features including 100% offset, free unlimited extra repayments and redraw, and the ability to transfer the loan to another property.

Borrowers can access their loan via cheque, EFTPOS, ATM, post, over the counter as well as phone and internet banking.

Bronze winner, Commonwealth Bank’s Economiser Home Loan, also offers a low interest rate of just 6.85% and a comparison rate of 6.91%. The Economiser Home Loan offers a free redraw facility, unlimited free extra repayments and a 100% offset facility. The loan is also portable and can be combined with other types of loans.

Silver medallist mecu’s Premium Home Loan $250k–500k also offers a competitive comparison rate of 6.69% and a headline interest rate of 6.69%. Both the winning product, Premium First Home Buyers Loan, and the Premium Home Loan $250k–500k have no mortgage preparation fees, no mortgage settlement fees and no application fees. In addition, the loan also has no monthly ongoing fees and valuation fees.

The CUA Standard Variable loan is also offered at a competitive comparison rate of 6.90% and a headline interest rate of 6.87%. Like the mecu products, CUA’s Standard Variable is fully-featured. Flexible options include 100% offset, free unlimited extra repayments and redraw, and the ability to switch and transfer the loan to another property. The loan also has low entry, ongoing and exit costs.

Best Standard Variable – Bank Best Standard Variable – Building Society/Credit Union

Commonwealth Bank Standard Variable (under Wealth Package)

mecu Premium First Home Buyers Loan


of 6.83%• Competitive interest rate of 6.66%• 100% offset account• 95% maximum LVR with lenders

mortgage insurance• Portable• Free unlimited extra repayments

and redraw• No minimum or maximum

limits to the amount that can be borrowed

Winning features• Low comparison rate of 6.59%• Low interest rate of 6.59%• Additional repayments • Free redraw facility• Free portability feature• 95% maximum LVR with lenders

mortgage insurance, 80% LVR without LMI

• 100% offset

Winners

Winners

Commonwealth Bank Standard Variable (under Wealth Package)

mecu Premium First Home Buyers Loan

St.George Bank Advantage Package Standard Variable Loan ($250k+)

mecu Premium Home Loan $250k–500k

Commonwealth Bank Economiser Home Loan

CUA Standard Variable





State Custodians Mortgage Company’s SCMC Breathe Easy Home Loan blew away the competition to win this year’s gold medal for Best Basic Variable offered by a non-bank, thanks to its low comparison rate of just 6.54% and its headline interest rate of 6.62% – which will drop to 6.42% after five years.

Alongside attractive interest rates, the SCMC Breathe Easy Home Loan also offers borrowers a full offset facility which can help reduce the interest paid by parking all income in the linked account.

Borrowers have the ability to split the loan up to four different ways and can make repayments using either a principal & interest or an interest-only method.

SCMC Breathe Easy Home Loan borrowers benefit from a range of additional features, including the ability to make unlimited additional repayments and redraws and the choice to split the loan to include a line of credit at no extra cost. Loan to value ratios are high at 95% with lenders mortgage insurance and 80% without, and the loan can be switched to fixed for a fee of $395.

The loan includes both a credit and a debit card, and can also be accessed via phone, mail or online.

Coming in second place this year is Reduce Home Loans’ Reduce Basic Variable loan with its super-low interest rate of just 6.09% and comparison rate of 6.54%. The loan also offers some flexible features including the ability to combine with other loans and to transfer the loan to another property as a security. Borrowers can access the loan via mail, phone and internet.

Quick Direct takes out the bronze medal this year with its Basic Variable home loan, boosted by its competitive comparison rate of just 6.59% and interest rate of 6.58%. Borrowers also enjoy a host of flexible features including the ability to make unlimited repayments, free redraws and the ability to switch to a fixed rate.

Best Basic Variable – Non-Bank

State Custodians Mortgage Company SCMC Breathe Easy Home Loan


of 6.54%• Unlimited additional repayments

and free redraws• Option to split loan for free• LOC split available at no

extra cost• 100% offset• Free salary crediting• Maximum 95% LVR with LMI • Maximum 80% LVR without LMI

Winners

State Custodians Mortgage Company SCMC Breathe Easy Home Loan

Reduce Home Loans Basic Variable

Quick Direct Basic Variable





A consistent top performer, ING DIRECT’s Mortgage Simplifier trumped the competition to win the Best Basic Variable Loan offered by a bank for the second year running. The Mortgage Simplifier has also consistently topped the Your Mortgage magazine Editor’s Choice Awards for best value basic variable loan over the past 12 months.

The product’s track record of low interest rates and low upfront, ongoing and exit costs have helped the ING DIRECT product secure the top position.

The Mortgage Simplifier offers borrowers a range of flexible benefits, such as the ability to make unlimited free extra repayments and free redraws. Borrowers also enjoy nil establishment and ongoing fees and the ability to repay the loan using either principal & interest or interest-only methods.

The loan, which can be accessed by mail, phone, via the internet and BPAY, is portable, allowing borrowers to transfer from one property to another for a $250 fee. It can be split for a fee of $100 and can be switched to a fixed rate for $250. The direct salary crediting feature also allows borrowers to reduce their interest payments by paying their salary directly into their loan account.

Available to both owner-occupiers and investors looking to enter the market

with a safe and flexible product, ING’s Mortgage Simplifier allows customers to borrow up to 90% loan to value ratio with mortgage insurance and up to 80% LVR without LMI.

Taking second place this year was another strong performer – AMP Banking’s Basic Variable Rate Loan. This product carries a competitive comparison rate of 6.81% and interest rate of 6.77%. While many basic variable loans do not offer full offset, the AMP Basic Variable Rate Loan comes with this option. When used properly, this facility can help homeowners reduce their mortgage by keeping all their income in the linked account which then offsets the mortgage. The AMP Basic Variable also offers the ability for borrowers to make unlimited free repayments and redraw, as well as portability and split facility. The loan can be accessed by mail, phone, the internet, Giro and BPAY.

ANZ’s Simplicity Plus rounded off the winners, taking this year’s bronze award with another competitive comparison rate of just 6.74% and interest rate of 6.71%. ANZ offers up to 95% LVR with LMI for existing customers and up to 80% LVR without LMI. The ANZ Simplicity Plus product allows borrowers to make free unlimited extra repayments and redraw, but it does not carry an offset facility.

Best Basic Variable – Bank

ING DIRECT Mortgage Simplifier

Winning features• Competitive comparison rate of

6.75% and interest rate of 6.74%• 90% LVR with LMI, 80% without• Unlimited free redraws (no min)• Unlimited free additional

repayments• Ability to split and to switch to

fixed rate• No mortgage preparation and

settlement fees• No establishment fees• No monthly ongoing fees

Winners

ING DIRECTMortgage Simplifier

AMP Banking Basic Variable Rate Loan

ANZSimplicity Plus





IMB Limited has won the gold medal in this year’s Best Basic Variable loan for building societies and credit unions award. Its Budget Home Loan product is a discounted variable rate home loan that offers borrowers many of the same features that normally appear in a fully featured loan but at a low cost.

IMB’s Budget Home Loan carries a very competitive comparison rate of 6.62% and an equally low interest rate of just 6.52%, beating its nearest rivals to scoop the top award for this category. Consumers have the ability to make extra repayments without cost or limit, as well as the ability to redraw when the need arises.

Borrowers can take up to a maximum of 95% LVR with lenders mortgage insurance and up to 80% for those without LMI.

IMB’s website is transparent with fee details easily visible and borrowers will find that the main points of access – phone, internet and over the counter – are sufficient for most transactions.

This basic variable home loan is portable so it can easily be transferred to another property as a security for a fee of $600 and can be split for $100. Switching out of the loan is possible with the payment of a $300 fee.

Coming in second for the Best Basic Variable loan provided by a building society is the Basic Home Loan from mecu. Pipped at the post by IMB’s low interest rates, this loan has a slightly higher but still competitive interest rate of 6.69% (comparison rate of 6.72%). It also offers an innovative ‘eco-pause’ which allows borrowers to take a break from their repayments to assist with the purchase of energy or water-saving devices.

Third place goes to Community CPS for its Basic Variable Home Loan, with an attractive interest rate of just 6.69% and comparison rate of 6.79%. The loan also allows additional repayments and redraws as well as the ability to switch and to transfer the loan to another property.

Best Basic Variable – Building Society/Credit Union

IMB Budget Home Loan

Winning features• Low comparison rate of 6.62%• Low interest rate of 6.52%• Free redraws• Unlimited additional repayments • Portable and can be split• Maximum 95% LVR with LMI • Maximum 80% LVR without LMI• No mortgage settlement fee• No establishment/valuation fees

Winners

IMB Budget Home Loan

mecu Basic Home Loan

Community CPS Basic Variable Home Loan





Reduce Home Loans has taken out first place in Your Mortgage’s 3-Year Fixed Loan category for the non-banks in this year’s competition.

The lender’s 3-Year Fixed loan scored gold for its low interest rates and selection of features. With an initial interest rate of 7.29% and roll rate of 6.59%, as at 14 May, this loan well and truly lives up to its company name.

The loan has no application or mortgage preparation fees and charges no ongoing fees. Borrowers can access up to a whopping $2m maximum loan amount. The loan lends up to 93% loan to value ratio with LMI, and 80% LVR without LMI. Additional loan repayments are allowed, but are capped at $10,000. The loan is also highly flexible with the inclusion of a 100% offset facility. By keeping all income in the offset account which is linked to the home loan, borrowers can reduce their mortgage effectively in a relatively painless manner.

Borrowers can split the loan at no extra charge, although the portability function will cost $250. Redraw and salary packaging features are also available. The loan offers convenience for borrowers, who can access the loan and make repayments via mail, ATM, cheque, phone, internet, giroPost and BPAY.

NAB trumped the 3-Year Fixed Loan category for banks with its Choice Package Home Loan Fixed Rate 3-Year >$250,000. NAB has performed well in 2010, also taking out the Bank of the Year award and placing second in the 5-Year Fixed Loan category.

As part of the Choice Package, this home loan offers an initial interest rate of 7.59% and a roll rate of 6.54%, as at 14 May, plus many other winning features. Borrowers enjoy the option of splitting the loan for free, as well as making use of the portability feature at no charge. Additional repayments up to $20,000 are allowed before the borrower begins to bear costs.

An annual package fee of $395 is considerably cheaper than the estimated total sum if the borrower was to select all of the package’s individual products and services separately.

Another advantage of opting for a package is the special deals offered by the bank. Borrowers can benefit from discounts on insurance products, no annual fees on selected credit cards, and no monthly service or transaction fees on transaction accounts. It’s beneficial for those who want to do all of their banking within NAB, but only if they actually need the included products.

Reduce Home Loans also took out first place in the best Line of Credit loan category and silver in the Basic Variable category.

Nipping close at its heels comes Austral Mortgage Corporation and its Advantage Plus 3-Year Fixed loan. This loan offers an initial interest rate of 7.50% and a roll rate of 6.8%, as well as offset, direct salary and portability features. The loan can be accessed via eight convenient means.

With an initial rate of 7.75% and roll rate of 6.63%, the bronze-winning HomeStar Advantage Fixed 3-Year Rate loan offers portability, the option to split and unlimited repayments. Salary packaging is available, while offset and redraw are not included in the home loan. Borrowers can take a maximum of 90% LVR with lenders mortgage insurance and up 80% LVR without LMI. The HomeStar product is also one of the very few mortgage products that does not carry any upfront fees such as mortgage preparation fee, application fee and mortgage settlement fee.

The loan offers a 95% loan to value ratio with lenders mortgage insurance, and 80% LVR without LMI. Redraws, however, are not available. Customers can access their loan through five key means: mail, phone, internet, over the counter and credit card.

Silver was awarded to Westpac’s PAP 3-Year $250,000–500,000 loan, which was a step back from the gold medal it won last year. With a huge LVR with LMI of 97%, and free redraw, split and portability features, it’s certainly a loan to consider.

ING DIRECT’s Fixed 3-Year loan, the recipient of bronze in 2009, maintained third position in 2010. Its 7.94% initial interest rate and 6.49% roll rate combine with portability and additional repayment features to form a well-rounded loan.

Best 3-Year Fixed Loan – Non-Bank Best 3-Year Fixed Loan – Bank

Reduce Home Loans 3-Year Fixed

NAB Choice Package Home Loan Fixed Rate 3-Year >$250,000

Winning features• Competitive interest rate

of 7.29%, roll to 6.59%• 93% LVR with LMI• No application or mortgage

preparation fees• No monthly ongoing fees• 100% offset available• Multiple access points including

phone, internet, mail and ATM• Free split function• Redraw available

Winning features• Competitive interest rate of 7.59%

and comparison rate of 7.05%• Single annual fee• 95% LVR with LMI• Can combine and split• Portability feature

Winners

Winners

Reduce Home Loans 3-Year Fixed

NAB Choice Package Home Loan Fixed Rate 3-Year >$250,000

Austral Mortgage Corporation Advantage Plus 3-Year Fixed

WestpacPAP 3-Year $250,000–500,000

HomeStar Advantage Fixed 3-Year Rate

ING DIRECTFixed 3-Year





The Rock Building Society’s Rock Star Fixed Rate Loan 3-Year ticked all the boxes in the 3-Year Fixed category for building societies and credit unions. The loan offers transparency and a broad range of benefits – features which also helped the building society take the gold for Low-Doc Loan and bronze for Line of Credit in 2010.

Special mention must be made of The Rock BS’s website – a transparent, detailed hub of information. Potential borrowers can find all the information they need in a user-friendly layout.

Unlimited additional repayments and unlimited free redraws are two standout loan features which helped secure the gold. The minimum redraw amount is $1,000, and this feature is available provided the account holds one payment in advance. These combined features are great for those who want to pay off their loan faster but also retain the ability to access the extra funds.

The Rock Star Fixed Rate loan has an initial interest rate of 7.49% and roll

rate of 6.64%, as at 14 May, and allows a loan amount up to $3.5m. Borrowers can access up to 95% loan to value ratio with lenders mortgage insurance.

The loan is portable at a cost of $250 and borrowers are required to pay an annual loan fee of $300. The loan scored high points in the loan access category, with mail, ATM, cheque, phone, EFTPOS, internet, over the counter and BPAY options available.

Two credit unions placed second and third, with Community CPS and CUA taking out the remaining two positions. The Community CPS pinnacle +plus 3-Year Fixed loan offers an initial rate of 7.54% and roll rate of 6.89%, with 95% LVR with LMI. Minimum redraws of $500 are applicable and additional repayments can be made up to $25,000.

CUA’s 3-Year Fixed Rate loan offers five access points and 100% offset. It allows loan split and portability functions for a fee.

Best 3-Year Fixed Loan – Building Society/Credit Union

The Rock Building Society The Rock Star Fixed Rate Loan 3-Year

Winning features• User-friendly website• 95% LVR with LMI• Unlimited additional repayments• Unlimited free redraws• Multiple access points

Winners

The Rock BS The Rock Star Fixed Rate Loan 3-Year

Community CPS pinnacle +plus 3-Year Fixed

CUA 3-Year Fixed Rate

YM101





HomeStar’s Advantage Fixed 5-Year Rate loan scored the top spot for the non-bank 5-Year Fixed Loan category. With an initial interest rate of 8.10% and a roll rate of 6.63%, as at 14 May, this loan has the added benefit of no application or settlement fees. In fact, all the upfront costs related to taking up a mortgage have been waived to make refinancing or switching easier for customers.

The option of unlimited additional repayments is a great boon for borrowers who want to pay off their loan faster. However, redraws are not available, meaning that once the money has been fed into the loan, it’s out of reach. This is useful for those trying to restrict spending and have excess funds to pay into their mortgage. This helps reduce the mortgage and saves interest costs.

Borrowers can split the loan for free and there is a portability feature, but this comes at a price of $250. A 90% loan to value ratio is available with lenders mortgage insurance and up to 80% LVR without LMI. Direct salary crediting is also on offer. The HomeStar loan has four access points: cheque, phone, internet and BPAY.

Next on the ladder is AMO with its Fixed 5-Year Home Loan. Its initial interest rate mirrors HomeStar’s at 8.1%, yet the roll rate rose to 6.85% after the May interest rate rise.

Additional repayments up to $20,000 are allowed in this loan and borrowers can split for free. Both direct salary and full offset are also available. However, the loan does come with a band of associated fees, including application, mortgage preparation and solicitor’s charges, as well as additional costs for portability and switching to fixed.

Third place was awarded to Austral Mortgage Corporation’s Advantage Plus 5-Year Fixed loan. It has an initial interest rate of 8.05% and roll rate of 6.80%, and allows LVRs of up to 90% with LMI.

Both 100% offset and all-in-one are available, and loan holders can make additional repayments up to $20,000. A split option is available for free, although the portability feature will cost. Eight loan access points are of great benefit to borrowers, but application, solicitor’s and valuation fees apply.

Best 5-Year Fixed Loan – Non-Bank



of 7.30%• No application, settlement and

other upfront fees• Low roll rate of just 6.63%• Unlimited additional repayments• Free split feature• 90% LVR with LMI

Winners


AMO Fixed 5-Year Home Loan

Austral Mortgage Corporation Advantage Plus 5-Year Fixed





Holding on to the gold, Westpac’s Premier Advantage Package (PAP) 5-Year $250,000–500,000 loan has taken out the bank 5-Year Fixed Loan category once again.

The reigning champion got the thumbs-up for its fantastic, flexible features. Additional repayments capped at $25,000 means that borrowers have the opportunity to pay off their home loan faster if they desire.

As with all loan packages, Westpac’s Premier Advantage Package offers great deals for those wanting to combine several products and services from the same bank. PAP borrowers can enjoy a range of credit card, insurance and wealth management benefits.

The five-year fixed loan offers a 7.94% initial interest rate and 6.81% roll rate, as at 14 May, with a minimum loan amount of $250,000 and maximum of $500,000. Its very high loan to value ratio of 97% with lenders mortgage insurance is a major bonus for those with a low deposit.

Features such as free split, free portability and free redraw are massive drawcards for borrowers. To be a member of the Premier Advantage Package,

After winning the bronze in the 3-Year Fixed Loan category, CUA has scored again, taking out the gold in the 5-Year Fixed Loan class. CUA’s 5-Year Fixed Rate loan offers a low initial interest rate of 7.99% and a roll rate of 6.37%, as at 14 May.

One of the loan’s winning factors is its flexibility for borrowers. Unlimited additional repayments are a welcome feature, as is unlimited, free redraws, with a minimum redraw amount of $1,000. This means loan holders can not only deposit extra funds when they have them, but also withdraw them as required.

A very high loan to value ratio of 97% with LMI is another helpful feature for borrowers with a small deposit. Full offset is available, but there is no direct salary crediting. The loan does come with a few fees; these include a $600 establishment fee, $500 portability fee and a split fee.

The silver went to Horizon Credit Union for its Fixed 5-Year loan. This loan also offers unlimited additional repayments and unlimited redraws; however, the minimum redraw amount is $500 and will cost $50.

however, you will need to pay an annual fee of $395. Customers can also conveniently access the loan via mail, phone, internet, over the counter and BPAY.

NAB’s Tailored Home Loan Fixed Rate 5-Year came in second place, with free unlimited redraws and 95% LVR with lenders mortgage insurance. Borrowers can split the loan at no extra charge and additional repayments up to the value of $20,000 are allowed.

ANZ Bank’s Fixed Rate 5-Year loan has no maximum loan amount and a 95% LVR with LMI for existing customers. Additional repayments are unlimited but the customer may incur a fee if they amount to more than $5,000 a year. The loan application fee comes to $600, with monthly charges of $10 occurring throughout the life of the loan.

The Fixed 5-Year loan offers an initial interest rate of 8.19% and a roll rate of 6.95%, with a maximum 95% LVR with lenders mortgage insurance. The loan’s portability, split and refix features all come with associated fees, while charges are also attached to application, valuation and solicitor’s services.

Community CPS’s pinnacle +plus 5-Year Fixed loan took the bronze. Community CPS has done well in the fixed rate classes, with its three-year counterpart placing second in the relevant category.

The loan charges an initial rate of 7.94%, which later becomes 6.89%. Borrowers can make additional repayments up to $25,000, and 95% LVR with LMI is also available. Fees will, however, be charged for mortgage settlement, switching to fixed, refixing and redraw.

Best 5-Year Fixed Loan – Bank Best 5-Year Fixed Loan – Building Society/Credit Union

Westpac PAP 5-Year $250,000–500,000


Winning features• Competitive interest rate of 7.94%

reverting to 6.81%, comparison rate of 7.34%

• 97% LVR with LMI• Free split• Free portability• Free redraw• Additional repayments to $25,000

Winning features• Flexible loan features• Unlimited additional repayments• Unlimited, free redraw• Full offset available• 97% LVR with LMI

Winners

Winners

Westpac PAP 5-Year $250,000–500,000


NAB Tailored Home Loan Fixed Rate 5-Year

Horizon Credit Union Fixed 5-Year

ANZ Bank Fixed Rate 5-Year

Community CPS pinnacle +plus 5-Year Fixed





RAMS Home Loans’ Easy Start fought off strong competition to win this year’s Best Introductory Loan by a non-bank lender, helped by its low interest rate of 6.29% over two years before it reverts to 6.39%. Comparison rate taken over 25 years stands at a competitive 6.73%.

The RAMS Home Loans Easy Start also scored high with its flexible features as well as the overall cost of taking and holding the loan.

Borrowers enjoy unlimited free additional repayments and the ability to redraw these excess funds at a later date without cost. The loan can also be transferred to another property by paying $295. The loan can be split, and also switched to a fixed rate loan for a $295 fee.

The loan allows up to 10 years’ interest-only payments for investment purposes. The loan has a $395 application fee but it does not charge an establishment fee.

HomeStar’s Rate Stopper took the silver medal with its competitive interest rate of 7.04%, capped for two years. During the introductory period, the comparison rate is calculated at 6.80%. The HomeStar Rate Stopper keeps its interest rate capped so that borrowers will not pay more than 7.04% during the first two years, even if the RBA raises interest rates a few times. After two years, the

HomeStar Rate Stopper will revert to 6.49%.

The loan can be accessed via the internet, over the counter, over the phone, ATM and EFTPOS. The loan allows unlimited additional repayments and redraws at no cost. The HomeStar Rate Stopper also comes with a 100% offset facility and portability.

Like all other HomeStar loan products, the Rate Stopper has no upfront costs, which makes it easier to refinance from the other mortgage providers. The Rate Stopper has also won this year’s Best New Product thanks to its low costs and innovative features.

Nationwide Mortgage took the bronze medal for its New Start Home Loan. A low interest rate of 5.77% which reverts to 6.75% after 12 months, and a competitive comparison rate of 6.77%, helped Nationwide Mortgage secure the third highest award. The New Start Home Loan can be accessed via phone, internet, ATM, EFTPOS and over the counter. The loan also allows free extra repayments and the ability to redraw at no cost. The loan is capped at 90% of the value of the property with lenders mortgage insurance, and 80% without LMI.

Best Introductory Loan – Non-Bank

RAMS Home LoansEasy Start

Winning features• Low comparison rate of 6.73%,

interest rate of 6.29% reverting to 6.39% after 24 months

• Maximum LVR of 95% with LMI• Max LVR of 80% without LMI• Unlimited extra repayments

and redraws• Portable• Split facility• Accessible through phone,

internet and BPAY

Winners

RAMS Home Loans Easy Start

HomeStar Rate Stopper

Nationwide Mortgage New Start Home Loan





AMP Banking’s Intro Professional Package $250,000 to $749,999 has won the gold medal and the top spot for the Best Introductory Loan product offered by a bank in this year’s competition.

The AMP product’s low interest rate of just 6.44% is among the lowest in this category. To complement the bargain interest rate, the product also does not carry an application fee, securitisation fee or mortgage preparation fee. Instead, borrowers will have to pay an annual fee of $349 for the package which includes a wide range of flexible features such as free additional and unlimited repayments, redraws and split facility. After the 12-month introductory period, the interest rate on the AMP product rolls over to 6.89%.

The AMP Banking Intro Professional Package $250,000 to $749,999 also carries a 100% offset facility, which is a handy feature if you have excess funds. By keeping all your income in the offset account, which is then linked to your mortgage, you’re able to slash thousands off your loan and cut the loan term dramatically.

Borrowers can borrow up to a maximum of 90% of the value of the property with lenders mortgage insurance and a maximum of 80% LVR without LMI.

The product is accessible via the internet, phone, ATM and EFTPOS.

The silver medal goes to another AMP Banking product, the Intro 1-Year Fixed then Professional Package Variable loan with its competitive interest rate of just 6.49% and equally low comparison rate of 6.87%. The loan also carries some flexible features such as the ability to make free extra repayments and redraw as well as portability. Unlike its winning sibling (the AMP Banking Intro Professional Package $250,000 to $749,999), the AMP Intro 1-Year Fixed does not have a 100% offset facility. The interest rate on this loan also reverts to 6.89% after the first 12 months.

Rounding out the top three Best Introductory Loans in Australia for banks is Bankwest’s Mortgage Shredder Intro 12-month Variable Rate with its competitive interest rate of 6.30% and comparison rate of 7.32%. After 12 months, the interest rate will revert to 7.30%. The loan offers an array of flexible features including full offset as well as free unlimited extra repayments and redraws. New borrowers can take up to 85% of the property with lenders mortgage insurance. Existing customers are allowed up to 95% loan to value ratio with LMI, provided they meet the bank’s conditions.

Best Introductory Loan – Bank

AMP Banking Intro Professional Package $250,000 to $749,999


interest rate of 6.44% reverting to 6.89% after 12 months

• Maximum LVR of 90% with LMI• Max LVR of 80% without LMI• Unlimited extra repayments

and withdrawals• 100% offset• Portability and split facilities• Accessible through a wide range

of channels• No monthly ongoing fees

Winners

AMP BankingIntro Professional Package $250,000 to $749,999

AMP Banking Intro 1-Year Fixed then Professional Package Variable

BankwestMortgage Shredder Intro 12-month Variable Rate





CUA has won the Best Introductory Loan from a Building Society/Credit Union category for its CUA 1-Year Introductory Variable Loan product in this year’s competition.

The loan was rated highly for its competitive interest rate of just 6.49% during the introductory period of 12 months and its comparison rate of 6.86%.

The loan also allows a relatively high loan to value ratio – the amount you can borrow against your property – at 97% with lenders mortgage insurance payable by the borrower. You can also opt to borrow up to 80% LVR without paying LMI.

The award-winning product carries a wide range of flexible features including the ability to make unlimited free repayments and redraws during the introductory period. It has portable features which allow you to transfer the loan to another property as security, however you need to pay $500 to activate this facility. You can also switch to fixed by paying a $250 fee. Borrowers are not charged a mortgage preparation fee, mortgage settlement fee or application fee.

Silver award winner IMB’s Discount Split Home Loan also boasts a

Reduce Home Loans’ Reduce Equity Loan took this year’s award for the Best Line of Credit Loan by non-banks, thanks to its ultra-low interest rate and comparison rate. The product also scored well in the flexibility stakes with its wide range of features including portability, free unlimited extra repayments, and split facility.

The application fee, settlement fee and valuation fee have been waived and the loan does not come with a monthly ongoing fee.

Borrowers can take a maximum of 93% of the value of the property with lenders mortgage insurance and up to 80% without LMI.

The loan can be accessed via the internet, phone and over the counter but there is no mail, credit card or EFTPOS access.

The Reduce Home Loans product has no application fee; however, you need to pay $250 to activate the portability feature. It’s also important to make sure you get a full list of costs right from the start, particularly the deferred establishment fees and break costs, as they are not readily available on the website.

State Custodians Mortgage Company’s SCMC Line of Credit also performed strongly in our rankings, boosted by

competitive comparison rate of 7.13% and a very low interest rate of 5.85%. After the 12-month introductory period, the loan reverts to 7.20%.

The loan allows borrowing up to 95% LVR with lenders mortgage insurance and up to 80% LVR without LMI. The loan can be accessed over the counter, through the internet and over the phone. Borrowers are allowed to make unlimited free additional repayments and the ability to access these funds when needed at no cost. The loan also offers portability for a $600 fee. A split facility is on offer for $100.

Community First Credit Union’s Capped Rate 12 Months loan has won the bronze medal, helped by its competitive comparison rate of 7.18% and 6.24% initial interest rate which then reverts to 7.24% after 12 months. The loan also allows up to 95% LVR with lenders mortgage insurance and up to 80% LVR without LMI. It also carries flexible features which include a 100% offset facility, the ability to make unlimited extra repayments at no cost, and portability.

its very competitive interest rate of just 6.14% and comparison rate of 6.43%.

Borrowers have access to a wide range of flexible features including the ability to make extra repayments, redraw, full offset as well as portability. There is no mortgage preparation fee, application fee or mortgage settlement fee charged to borrowers when taking this loan. However, there is a monthly ongoing fee of $28.75.

The loan allows up to a maximum of 90% loan to value ratio with lenders mortgage insurance.

HomeStar’s Advantage Variable took the bronze award with its competitive interest rate of 6.47% and comparison rate of 6.63%. The HomeStar Advantage Variable offers a wide array of flexible features such as the ability to make extra repayments, redraws and portability, and charges no upfront fees such as application, mortgage settlement or mortgage preparation fees. Borrowers are also able to check all the fees and costs involved when taking the loan due to the transparency of the HomeStar website, which has also won this year’s Best Lender Website award.

Best Introductory Loan – Building Society/Credit Union

Best Line of Credit Loan – Non-Bank

CUA 1-Year Introductory Variable Loan

Reduce Home Loans Reduce Equity Loan


interest rate of 6.49% reverting to 6.87% after one year

• Maximum LVR of 97% with LMI• Maximum LVR of 80% without LMI• Unlimited extra repayments

and redraws• Portability and split facilities• Accessible through phone,

internet, giroPost and over the counter

Winning features• Competitive interest rate of 6.34%,

low comparison rate of 6.35%• 93% maximum LVR with

lenders mortgage insurance, 80% without LMI

• Portable• Free unlimited extra repayments

and redraws• No application fee, settlement fee

or ongoing fee• Accessible via phone, internet and

over the counter

WinnersWinners

CUA 1-Year Introductory Variable Loan Reduce Home Loans

Reduce Equity Loan

IMB Discount Split Home Loan State Custodians MC

SCMC Line of Credit

Community First CU Capped Rate 12 Months HomeStar

Advantage Variable





Newcastle Permanent Building Society’s Premium Plus LOC Tier 1 ($250k–500k) took this year’s Best Line of Credit offered by a building society or credit union, bolstered by its ultra-low interest rate of just 6.49%.

The product is further enhanced by the wide range of flexible offerings including the ability to make free unlimited extra repayments, redraw and loan split without cost. The loan can also be transferred to another property as a security at a cost of $300.

Newcastle Permanent also does not charge borrowers upfront fees such as mortgage preparation, settlement and loan establishment fees, which all help bring down the cost of setting up a new mortgage or refinancing. The Newcastle Permanent Building Society Premium Plus LOC Tier 1 ($250k–500k) is accessible through a broad range of channels including over the counter, ATM, EFTPOS, phone and over the internet.

The maximum lend is capped at 90% of the value of the property with lenders mortgage insurance charged on borrowers. Borrowers can also opt to take up to 80% loan to value ratio without LMI.

Taking the silver medal was Heritage Building Society with its Professional Package Living Equity product. Among the winning features of the loan include a competitive comparison rate of just 6.84% and a string of flexible features. This includes the ability to make free unlimited additional repayments, redraws and loan splitting. The loan is also portable at a cost of $450. The maximum lending is capped at 85% with lenders mortgage insurance and 80% without LMI.

The bronze award goes to The Rock Building Society’s The Rock Star Line of Credit >$250k. A low comparison rate of 6.79% and a wide range of flexible features helped this product secure the third top place in this year’s ranking. The loan can be accessed via over the counter, mail, phone, internet, ATM and EFTPOS.

There is no application or mortgage settlement fees but the loan comes with a $300 annual ongoing fee. Lending is also capped at 85% with lenders mortgage insurance charged to borrowers.

Best Line of Credit Loan – Building Society/Credit Union

Newcastle Permanent Building Society Premium Plus LOC Tier 1 ($250k–500k)


interest rate of 6.49%• Maximum LVR of 90% with LMI• Maximum LVR of 80% without LMI• Unlimited extra repayments and

withdrawals• Portability and split facilities• Accessible through a wide range

of channels• No mortgage preparation,

settlement, application or loan establishment fees

Winners

Newcastle Permanent Building Society Premium Plus LOC Tier 1 ($250k–500k)

Heritage Building Society Professional Package Living Equity

The Rock Building Society The Rock Star Line of Credit >$250k





NAB beat off some stiff competition to take the Your Mortgage magazine award for Best Line of Credit Loan in the bank category.

The NAB Home Equity Line of Credit had the lowest interest rate (at 6.72%) of all bank offerings in the line of credit category. The NAB product also carries the lowest comparison rate of all line of credit loans offered by banks at just 6.81% after fees were taken into account. The NAB product scores highly for its flexible offering including the ability to make unlimited repayments and redraws.

Other features included in its line of credit loan that helped put NAB into the top spot were its portability, which allows customers to transfer the loan to a new home for no extra fee. It also allows customers to make withdrawals by several methods, including ATM, EFTPOS, phone and internet banking.

NAB’s Home Equity Line of Credit home loan can be used to access the equity in your property and utilise it for renovations, investments or other personal purchases.

Mortgage House emerged as this year’s winner of the Best Low-Doc Loan for non-banks. Its Essential Offset Home Loan product offers borrowers a rare combination of low interest rate and a high level of flexible features.

This standard variable loan carries a full offset account as well as the ability to make additional repayments at no cost. Borrowers can also take advantage of the free redraw provided they withdraw at least $500.

The loan offers high accessibility including ATM, cheque, phone, EFTPOS, internet, BPAY and credit card access. The loan is also portable so borrowers can easily transfer it to another property as a security. Repayments can be made on principal & interest or on interest-only for up to 10 years. Because of the low-doc nature of the loan, Mortgage House has capped lending at 60% of the value of the property. The loan has no application fee, settlement fee, establishment fee or ongoing fees.

In second place again this year is BetterOption’s Low Doc Variable home loan. Scoring highly for a very competitive comparison rate of 6.50%, this product also offers both all-in-one and 100% offset options, plus unlimited

The NAB Home Equity Line of Credit also won the Your Mortgage magazine Best Line of Credit (bank) in 2008.

Hot on NAB’s heels was silver medal winner Westpac’s LOC-PAP Equity Access $250k–500k. The loan also carries a competitive interest rate of just 6.96% and a comparison rate of 6.97%. The Westpac product scored highly for a range of features including portability, free unlimited extra repayments and direct salary crediting.

The ING DIRECT SmartPack Smart Home Loan >$300k took the bronze award, boosted by its low comparison rate of 6.95% and headline interest rate of 6.84%. It also scored well on its flexible features which include free extra repayments and redraws, portability and the ability to switch and split it with other loan types. Customers can access the loan from a variety of sources including ATM, mail, phone and the internet.

repayments and free redraw. The maximum lending is capped at 82% with lenders mortgage insurance and 80% without LMI.

Third place goes to Homeside Lending with its Home Plus Home Loan Variable (>$250k) LVR <75% loan, with its competitive comparison rate of 6.55% and interest rate of 6.47%. This loan offers a high LVR of 95% with lenders mortgage insurance and 75% without LMI. Borrowers also benefit from a 100% offset account that’s linked to the mortgage. Redraws are unlimited, however there is a $2,000 minimum each time you redraw.

Best Line of Credit Loan – Bank Best Low-Doc Loan – Non-Bank

NAB Home Equity Line of Credit

Mortgage House Essential Offset Home Loan


interest rate of 6.72%• Maximum LVR of 90% with

lenders mortgage insurance• Unlimited extra repayments

and redraws• Portable• Split facility• Accessible through a wide range

of channels


of 6.58% • Low interest rate of 6.54%• Free unlimited additional

repayments • Free redraws• 100% offset available• No application or

establishment fees• Principal & interest or interest-

only repayments• Maximum 60% LVR

Winners

NAB Home Equity Line of Credit

Westpac LOC-PAP Equity Access $250k–500k

ING DIRECT SmartPack Smart Home Loan >$300k

Winners

Mortgage House Essential Offset Home Loan

BetterOption Low Doc Variable

Homeside Lending Home Plus Home Loan Variable (>$250k) LVR <75%





Commonwealth Bank snatched the top gong for this year’s Best Low-Doc Loan for the bank category with its Standard Variable Rate (under Wealth Package) home loan thanks to its very competitive comparison rate of just 6.85% and interest rate of 6.66%.

The low interest rate and comparison rate is complemented by a wide array of flexible features such as the ability to make unlimited additional repayments, unlimited free redraws and the option to split the loan for free. Repayments on the loan can be made using either a principal & interest or interest-only method. The loan also comes with a full offset facility to help borrowers pay off their mortgage faster by depositing all their income into the linked account that in turn offsets the mortgage.

Because of its low-doc nature, the maximum loan to value ratio is capped at 80% of the value of the property.

Commonwealth Bank’s Standard Variable Rate is portable and can be moved from one property to another for a fee of $300. Borrowers can also choose to switch their loan to a fixed rate for a once-only charge of $300.

The Rock Building Society has won the gold medal in this year’s Best Low-Doc Loan from a Building Society or Credit Union with its The Rock Lo Doc Line of Credit product.

The Rock Lo Doc Line of Credit loan offers borrowers the ability to make unlimited additional repayments without penalty so long as the loan is not paid off within four years. It also features a comparison rate of 8.40%, alongside a competitive rate of 8.09%.

The loan allows direct salary crediting and the ability to switch to a fixed rate for a fee of $250. You would also need to pay $275 if you wanted to activate the portability feature. The loan allows unlimited free redraws with a $1,000 minimum. The loan can be accessed via phone, internet, ATM, EFTPOS and over the counter.

The loan offers an interest-only option, but borrowers can also choose to pay principal to help reduce their mortgage faster. As is common with low-doc loans, The Rock Lo Doc Line of Credit has a capped loan to value ratio of 80% with or without lenders mortgage insurance, so borrowers need to ensure they have

Conveniently, CBA also offers borrowers a wide range of access points to their funds, including phone, mail, ATM, EFTPOS, internet, over the counter, Giro, BPAY and credit card.

Taking the silver medal this year is ANZ with its ANZ Simplicity Plus Lo Doc 60 loan. With a variable rate of 6.71% and a comparison rate of 6.77%, this loan offers borrowers 60% LVR, the ability to pay interest-only for up to 10 years, and allows borrowers to switch or split their loan for a fee of $200.

Bronze medallist Westpac, who took the silver in last year’s awards, has rounded off the winners with its PAP 2-Year $250,000–500,000 home loan. This loan continues to benefit customers by offering the ability to make additional repayments up to $25,000, unlimited free redraws and the option to split for free.

20% deposit available in genuine savings before purchasing.

The loan allows a maximum of two splits and up to 10 years’ interest-only payment term.

Product sheets are available for download on the lender’s easy to navigate website.

Best Low-Doc Loan – Bank Best Low-Doc Loan – Building Society/Credit Union

Commonwealth Bank Standard Variable Rate (under Wealth Package)

The Rock Building Society The Rock Lo Doc Line of Credit

Winning features• Comparison rate of 6.85%• Interest rate of 6.66%• Access to funds via phone,

internet, mail, ATM, over the counter, Giro, BPAY and credit card

• Maximum 80% LVR • Unlimited free additional

repayments and redraws• Split for free• 100% offset available

Winning features• Comparison rate of 8.40% and

interest rate of 8.09%• Unlimited additional repayments

and free redraws• Direct salary crediting • Portable• No mortgage preparation fee and

no settlement fee• 80% maximum loan to value ratio

with lenders mortgage insurance

Winners

Commonwealth BankStandard Variable Rate (under Wealth Package)

ANZ ANZ Simplicity Plus Lo Doc 60

Westpac PAP 2-Year $250k–500k





With consumers turning more and more to the internet as a source of information, Your Mortgage has created a new award this year to recognise excellence in web design and usability.

Winning our first ever award for Best Lender Website is the non- bank lender HomeStar (www.homestarfinance.com.au). With a clear, bold black and orange design, HomeStar’s website uses creative yet concise graphics to present vital information to consumers.

Rates feature prominently on the homepage and include easy to find links that allow consumers to calculate their borrowing capacity and monthly repayments. The SuperStar, 100% Offset and Advantage loans displayed on the homepage can also be compared to help inform consumers about differing features and benefits. Thanks to the well planned flow of the site, loan features, comparison rates and fees are clearly laid out in a way that allows consumers to fully research each product before speaking to a consultant.

The HomeStar website possesses a navigation that is both clear and simple, allowing consumers to quickly access key components such as products, FAQs, calculators and a pre-approval form that can be completed online. Contact information is also easy to find with a

phone number prominently located on every page.

In terms of usability, consumers are gently led through the steps required to help them find a suitable product. Each step of the way they are prompted to check their borrowing capacity and expected monthly repayments using HomeStar’s online calculators. These calculators are easy to use and present necessary information in a simple and glitch-free graphic.

HomeStar’s form design is also excellent with clearly marked mandatory fields and information icons that assist consumers with any necessary explanatory details. Simple and to the point, consumers can fill out any necessary details quickly and easily, without requiring an in-depth knowledge of the lender’s products.

All the detail – including supplementary explanations – is included on the page using savvy rollover icons. Not only does this make the information more engaging and easy on the eye, it also improves accessibility by allowing consumers who otherwise have pop-ups blocked to access vital information.

FAQs are presented in clear and simple English, with an obvious effort to improve the consumer’s understanding of complex lending terminology. There’s even a section on government

Best Lender Website

HomeStar

Winning features• Clear, easy to navigate design• Informative product tables• Easy to find contact information• Prominent display of rates• Useful comparison tables• Clear and simple FAQs

fees to further educate consumers on anticipated costs.

Boasting an uncomplicated design that offers transparent access to information, HomeStar’s website provides a benchmark for accessibility that is necessary in today’s information age.





BANK WINNERS

Best standard variaBle loanCommonwealth Bank Standard Variable (under Wealth Package)St.George Bank Advantage Package Standard Variable Loan ($250k+)Commonwealth Bank Economiser Home Loan

Best Basic variaBle loanING DIRECT Mortgage SimplifierAMP Banking Basic Variable Rate LoanANZ Simplicity Plus

Best intro loan

AMP Banking Intro Professional Package $250,000 to $749,999AMP Banking Intro 1-Year Fixed then Professional Package VariableBankwest Mortgage Shredder Intro 12-month Variable Rate

Best 3-Year fixed loanNAB Choice Package Fixed Rate 3-Year >$250kWestpac PAP 3-Year $250,000–500,000ING DIRECT Fixed 3-Year

Best 5-Year fixed loanWestpac PAP 5-Year $250,000–500,000NAB Tailored Home Loan Fixed Rate 5-YearANZ Bank Fixed Rate 5-Year

Best low-doc loanCommonwealth Bank Standard Variable Rate (under Wealth Package)ANZ ANZ Simplicity Plus Lo Doc 60Westpac PAP 2-Year $250k–500k

Best line of credit loanNAB Home Equity Line of CreditWestpac LOC-PAP Equity Access $250k–500kING DIRECT SmartPack Smart Home Loan >$300k

Mortgage of the Year Ratebusters Fightback Premium

Non-Bank Lender of the Year HomeStar

Best Lender Website HomeStar www.homestarfinance.com.au

Bank of the Year NAB

Building Society/Credit Union of the Year CUA

Best New Product HomeStar Rate Stopper

Best Loan for First HomeBuyers State Custodians Mortgage Company SCMC Standard Variable Loan

Best Loan for Investors PMPAdvantage Home Loan

18th annual Your Mortgage magazine’s Mortgage of the Year Awards summary of winners

NON-BANK WINNERS

Best standard variaBle loan Ratebusters Fightback PremiumRatebusters Maxi 90State Custodians Mortgage SCMC Standard Variable Home LoanCompany

Best Basic variaBle loanState Custodians SCMC Breathe Easy Home Loan Mortgage Company Reduce Home Loans Basic VariableQuick Direct Basic Variable

Best intro loanRAMS Home Loans Easy StartHomeStar Rate StopperNationwide Mortgage New Start Home Loan

Best 3-Year fixed loanReduce Home Loans 3-Year FixedAustral Mortgage Corporation Advantage Plus 3-Year FixedHomeStar Advantage Fixed 3-Year Rate

Best 5-Year fixed loanHomeStar Advantage Fixed 5-Year RateAMO Fixed 5-Year Home LoanAustral Mortgage Corporation Advantage Plus 5-Year Fixed

Best low-doc loanMortgage House Essential Offset Home LoanBetterOption Low Doc VariableHomeside Lending Home Plus Home Loan Variable (>$250k) LVR <75%

Best line of credit loanReduce Home Loans Reduce Equity LoanState Custodians MC SCMC Line of CreditHomeStar Advantage Variable

BUILDING SOCIETY/CREDIT UNIONS WINNERS

Best standard variaBle loanmecu Premium First Home Buyers Loanmecu Premium Home Loan $250k–500kCUA Standard Variable

Best Basic variaBle loanIMB Budget Home Loanmecu Basic Home LoanCommunity CPS Basic Variable Home Loan

Best intro loan

CUA 1-Year Introductory Variable LoanIMB Discount Split Home LoanCommunity First CU Capped Rate 12 Months

Best 3-Year fixed loanThe Rock BS The Rock Star Fixed Rate Loan 3-YearCommunity CPS pinnacle +plus 3-Year FixedCUA 3-Year Fixed Rate

Best 5-Year fixed loanCUA 5-Year Fixed RateHorizon Credit Union Fixed 5-YearCommunity CPS pinnacle +plus 5-Year Fixed

Best low-doc loanThe Rock BS The Rock Lo Doc Line of Credit

Best line of credit loanNewcastle Permanent Premium Plus LOC Tier 1 Building Society ($250k–500k)Heritage BS Professional Package Living EquityThe Rock BS The Rock Star Line of Credit > $250k



how the loans are comparedLoans that qualified for the awards were ranked according to their comparison rate and the awarding of feature points (‘points’).

The comparison rate incorporates the basic interest rate with all fees necessary to establish and maintain the loan. The lower the comparison rate, the better.

Points were awarded to loans according to nine main criteria. The more points the better.

The comparison rate was multiplied by 100 and the points deducted. The lower the total the better.

Extra points were also awarded for the product’s transparency with costs and conditions as well the product’s accessibility. The loan’s long-term performance was also considered and taken into account when deciding on the final winners.

Points for the 2010 awardsPoints were awarded in nine different areas within which a number of different criteria were assessed.

1. additional payments without penaltyTen points were awarded to loans allowing additional or lump sum repayments, including during a capped or fixed period, without incurring any fees or charges, subject to the following conditions:• Variable loans: No limit to the number of

additional repayments which can be made.• Fixed loans: Maximum additional

repayments must be at least $5,000 or 5% of the original loan principal per year.Payments to a 100% offset account

facility were considered to be additional repayments.

2. combination loan facilityFive points were awarded to products which allowed borrowers to combine the loan with one or more products at no extra cost.

3. PortabilityFive points were awarded to products which could be transferred from one property to another for a fee of $500 or less.

4. redraw facilityTen points were awarded to loans with redraw facilities. Additional points were awarded based on the minimum redraw amount, with at least 12 free redraws per year.

Where products had less than three free redraws per annum, points were deducted based on the fee per redraw. Three additional points were awarded where no limit was imposed on the number of redraws.

5. Maximum percentage of valuation lent with lenders mortgage insuranceHalf a point was awarded to loans for every percentage point above 90% of valuation that could be borrowed with mortgage insurance.6. Maximum percentage of valuation lent without lenders mortgage insuranceOne point was awarded to loans for every percentage point above 80% of valuation that could be borrowed without lenders mortgage insurance.

We subtracted one point for each percentage point the maximum is below 80%, to a maximum of 20 points.

7. switch to fixed/refixThree points were awarded to variable or introductory loans which allowed switching to a fixed loan at no cost, as well as to fixed loans which allowed the choice of another fixed term at the end of the first fixed period at no cost.

8. offset accountsIn Scenario 2, 60 points were awarded to a loan considered to have a 100% offset account or all-in-one account (20 points in Scenarios 1 and 3).

Partial offset account loans were awarded five points and three additional points if they had five or more free withdrawals per month.

Three additional points were awarded if the offset account allowed five or more free withdrawals per month. If withdrawals or transfers could also be made, then one point was awarded for each way this could be done (eg ATM, EFTPOS, cheque etc).

9. all-in-one loansIn Scenario 3, 60 points were awarded to a loan that allowed all income to be credited to the loan account and amounts withdrawn as required with no minimum withdrawal amount (30 points for Scenarios 1 and 2).

Line of creditA line of credit product was required to have a maximum credit limit (MCL) equal to 75% of the securing property value or higher. The MCL must not reduce within the first five years of the facility and the borrower must be able to draw down to the MCL at any time during this period.

Introductory loans We have defined introductory loans as any fixed, capped or discount variable loan with a term of 12 months or longer, which rolls over to a higher interest rate at the end of its

term, as well as any loan named introductory or discount, offered for a term of 12 months or longer.

EligibilityOnly residential mortgages were eligible. Construction, vacant land, project building, bridging loans were not included.

All institutions in the YM loan database as at 14 May 2010 were eligible for the awards. Only products available at 14 May 2010 and still available at our publication deadline were considered.

A loan by the same provider, with the same name and interest rates but with different establishment fees in different states, was treated as different products.

A maximum of two products per lender were considered in each category, according to rank.

Products had to fit all three scenarios to be considered. Exceptions are the line of credit products.

Loan feesAll fees, except government charges, were included in the calculations.

Any fee charged so as to have a particular feature included on the loan was incorporated into the points awarded.

The Your Mortgage magazine comparison rate methodologyThe comparison rate formula as laid out in the Uniform Consumer Credit Code was used for calculating the awards, however the loans were assumed to remain steady throughout the remaining period of the loan. Loans with an initial fixed rate period or capped rate were assumed to revert to the rate listed as the variable/roll rate.

All fees and charges associated with each mortgage were identified, checked and standardised prior to commencing the task of determining the rankings

Mortgage discharge costsMortgage discharge costs are included in the internal rate of return calculation. We assumed that these fees are charged at the end of seven years and that all loans are paid out after seven years.

For full details and rules please visit www.yourmortgage.com.au/moty/rules

Documents

Your Mortgage 101