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A regional lender’s ‘rate tracker’ home loan has been recognised as the “Innovative Mortgage Offering of the Year” at the Australian Retail Banking Awards.
Auswide Bank was recognised last week for its RBA Rate Tracker Home Loan, which mimics the movements of the Reserve Bank of Australia (RBA) cash rate.
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The loan was introduced in October 2016 to provide “certainty of a fixed margin over the RBA cash rate”. If the RBA moves interest rates up or down, the Auswide loan follows by the same percentage.
The rate tracker loan launched with a variable interest rate of 3.99 per cent (comparison rate 4.01 per cent) and, in contrast to the interest rate fluctuations of other banks, has not changed since. Should the RBA rate drop to 0 per cent or lower in the future, the customer will continue to pay the fixed margin.
Auswide Bank managing director, Martin Barrett, said that internationally and particularly in Europe, rate tracking loans were popular but that big banks in Australia lagged behind.
“The availability of tracker mortgages in Australia was a significant topic at the Australian government's House of Representatives standing committee on economics’ inquiry into the four major banks launched after the major banks failed to match the RBA's interest cut in August 2016,” he said.
The loan is available through accredited brokers or Auswide Bank directly for new owner-occupied home loans of $150,000 or more, provided the loan-to-value ratio (LVR) does not exceed 80 per cent.
“It speaks volumes about how Auswide Bank is working hard to be different to other lenders with unique products and better experience and benefits for our customers,” Mr Barrett said.
“This year’s awards saw a greater presence by the bigger banks in the winner’s circle, so we are all very excited about our home loan receiving this national recognition,” he said.
[Related: Australia’s ‘first’ rate tracker mortgage launches]
