Is this the best interest rate in Australia for sea and tree changers?
One of the biggest names in customer-owned banking, BCU, has launched a new rate that seems perfectly tailored for the growing tree-changers demographics.
Tree changers are a major driver of Australia’s real estate market, representing a demographic shift that has seen professionals leave cities for the country as the pandemic has made working from home part of the new normal.
BCU’s new rate rewards those with a Loan to Value Ratio (LVR) below 60%, which includes a large chunk of those who sell high priced properties in Sydney and buy more reasonably priced homes in the city. Regional Australia.
Those with 60% or less LVR can access a variable rate of 2.29%, while the next level, 60-80%, will get 2.39% BCU.
Speaking to Australian Broker, BCU chief executive Michael Ribbens said tree changers were a key demographic in Coffs Harbor, where the bank is based.
“We see a lot of this,” he said. “There are a lot of people in Sydney and Melbourne who can work from home and wonder why they have to pay a massive mortgage in the city when they can live in Coffs Harbor, Port Macquarie or one of these. regions and probably sell their house. and have a smaller mortgage obligation. :
“The challenge for brands like ours is that the average person in Sydney might not know who BCU is. By the time they enter town, they will certainly know about us. But they might come up with their own home banker, who will no doubt try to help them with their next home in this area. “
“I think over time, as they hear our publicity and see what our proposition is for the members, they will give us serious consideration. We’re seeing a lot of refinancing opportunities that we’re getting from people in Sydney, and with our latest $ 5,000 cash back offer, it’s a compelling proposition.
The rate itself is one that is rarely seen in the market.
“We’ve always had a popular OMG product, and although the title is a competitive 2.44%, we decided we wanted to reward our members who have a lower LVR,” said Ribbens.
“We created these two lower levels, 60-80% and lower than 60%, and because the risk profile of those is different, so we thought the cost should be too. “
“We thought we would be proactive and really help the members who, especially in the days of Covid, are doing it hard. It’s a great way for us to show that being with a mutual is a great way to save money and that our only goal is to make members’ financial dreams come true.
“There are a few players who offer this, but not a lot. You won’t see it being advertised very heavily in the market, although I know a few other players are offering it. “
Brokers are often quick to jump on deals that can see simple loans approved quickly and at a good rate for their client.
“Brokers have a duty to give their clients the best deal they can find, and we can make it easy for them as well,” said Ribbens. “Price is a part, but getting the transaction through the organization is just as important to the broker and his client.”
“This is where we work very hard to make sure we have smooth processes, and with competitive pricing, this should be a winner for all parties.”
Customer-owned banks may be in a unique position to provide these rates and offers.
“Each of the brands that exist in Australia has its unique positioning,” explained Ribben. “Whether it’s their heritage or their presence in a local market, and one of the things I’ve learned across New South Wales and South Queensland is that every city is different.”
“There are brands that are powerful in certain cities and at BCU we have certain areas of the core where we are a household name and most of the people in the city would know us and probably would have had an account with us.”
“We like the idea that the BCU brand can be adopted by the local community and we try to advertise profitably so as not to spend too much money on marketing, but we get enough profile for the member to can experience what we believe to be a unique service.
Read more: How a customer-owned bank fixes the lowest interest rate in Australia