Product ranking - Investment loans

Many economists believe this buyer segment will dominate the property market in months to come.

According to McGrath Estate Agents’ chief executive John McGrath, with property prices falling and rents rising, there couldn’t be a better time to invest if you have the money to do so.

With this in mind, The Adviser – together with our data analyst partner Pisces – decided to review and rank Australia’s leading investment home loans.

Investment loans can vary dramatically in the current market, depending on what clients are looking to achieve, and they can be either very simple (like a standard home loan) or more complex, allowing clients to make the most effective use of tax, gearing and repayment options.

Investment clients can also make good use of loan features such as redraw, offset and additional repayment facilities to help them manage their loan.

The five investment loans under review this month were:

• ANZ – Standard Variable Rate (Breakfree)

• Bankwest – Premium Home Loan

• CBA – Standard Variable Loan (MAV)

• Homeside – HomePlus Home Loan

• Macquarie – Premium (Optimum)

To analyse the results, The Adviser once again called on its broker panel and Pisces to rate and rank the leading investment mortgage products from Australia’s major and second-tier lenders.

In developing the ranking, Pisces applied a process that considered not only product specifics such as interest rates, discharge fees and other quantitative measures but also the perception of brokers themselves, including their thoughts on servicing times and lenders’ overall policies.

A CUT ABOVE

Homeside was the standout performer across all product metrics, with the lender ranking first or second in every category.

But while Homeside outshone its competitors in the various product categories, differences between the lenders were less marked when it came to broker sentiment.

ANZ and Bankwest both performed well, with each lender taking out a top spot in the broker-rated categories.

ANZ was voted the number one lender for credit policy, while Bankwest was considered by brokers to deliver the best customer service.

Homeside beat the rest of the pack in two categories – ease of dealing with lenders and features – helping to catapult the bank to first place overall.

ANZ also performed well, taking out second position overall.

According to Pisces, the major impressed brokers in three of the four key categories. In addition, ANZ performed consistently well across the various product metrics.

While the lender does not boast the sharpest rate of all the banks – placing fourth out of five in this category – it does offer the lowest additional fees and charges, performing well on discharge fees and total fees.

According to the data, each of the lenders has some clear strengths but some equally clear weaknesses, making for an interesting analysis and well-fought competition.

CBA, for example, has the highest total fees of the lenders ranked, but managed to outperform the competition in both the scenarios used.

Similarly, Macquarie Bank performed very strongly across the broker-rated categories but failed to hit the mark when it came to product metrics.

Macquarie’s popularity among brokers is notable, given that the global financial crisis forced the lender to pull out of the third party channel for some time.