# Low rate mortgage lenders: Too good to be true?



## MissMoneyPenny (5 February 2011)

Good Morning,
I am looking at home loans and the online company Rate Busters got my interest. The current variable rate is 6.86%. There are limited fees, offset account and other features.

It sounds too good to be true. Does anyone have experience with this company? Are they more likely to put interest rates up above the reserve bank rises in the future to recover the additional discounts?

Any feedback appreciated.

Cheers,
Miss Money Penny 

http://www.ratebusters.com.au


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## Good Vibes (5 February 2011)

*Re: Low rate mortgage lenders eg Rate Busters. Too good to be true?*



MissMoneyPenny said:


> Good Morning,
> 
> I am looking at home loans and the online company Rate Busters got my interest. The current variable rate is 6.86%. There are limited fees, offset account and other features.
> http://www.ratebusters.com.au




Got similar from RAMS recently... worth considering because of broader product range options and they are reputable.

Here is a review I found on the net regarding Rate Busters:



> Ratebusters had won lender of the year for 3 years running and their rate was about 0.2% lower than the "professional pack" offered by the big 4. However, 3 years on, I still have hefty exit fees and they are now charging 0.1% higher than the professional pack of the big 4. They do however have "another product" which is at a lower rate! I feel like I've been sucked in, locked in and ripped off.




Not very inspiring


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## matty77 (5 February 2011)

*Re: Low rate mortgage lenders eg Rate Busters. Too good to be true?*

Make sure you do a comparison with ALL fees included, plus make sure you fully understand what the early termination fees are on the loans, work it out over 3 years compared to other loans including changing loans at the end of the 3 year period.


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## Julia (5 February 2011)

*Re: Low rate mortgage lenders eg Rate Busters. Too good to be true?*

Miss moneypenny,  this website will allow you to compare all available rates:

http://www.infochoice.com.au/


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## tothemax6 (6 February 2011)

MissMoneyPenny said:


> Good Morning,
> I am looking at home loans and the online company Rate Busters got my interest. The current variable rate is 6.86%. There are limited fees, offset account and other features.
> 
> It sounds too good to be true. Does anyone have experience with this company? Are they more likely to put interest rates up above the reserve bank rises in the future to recover the additional discounts?
> ...



The hint is that it is their _current_ _variable_ rate. They can set it to whatever they wish in the future, depending on the contract. You'll have to read their PDS to understand the loan they are offering.
To me it looks obviously too good to be true. When you can get 6.5% on a savings account (0 term loan to the bank), and home loans can go up to a 30 years term, there is no way that 6.86% is currently profitable for the bank to issue home loans at.


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## Knobby22 (7 February 2011)

Yes, my Dad was burnt on one of those 15 years ago.

The main/big banks do it also. You will find that people who thought they were getting a good deal with 0.5% off now find people signing up with 0.75% off. In other words the bank has moved up the rate an additional 0.25%.

I am with ME bank. Same rate all the time. No discounts etc. 
I am paying under all my friends and workmates and have been for the last 10 years.

The rate is now 7.24%, no fees. 7.99% fixed for 5 years. You can split the loan.


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