Thank you for your responses. Peter great points, I'll make sure I ask them the questions.
Just to share some of the info that I already gathered from them:
- Break/exit costs are zero save for the seemingly standard $300 discharge fees (State Custodians also charge legal fees, not sure how much)
- loans.com.au does deal with trust loans, haven't asked State Custodians yet.
- The offset are pretty basic: online account, debit Visa/MasterCard, limited ATM access, unlimited Eftpos, unlimited online transfers, etc.
- I remember looking at the track record of passing interest rates, both seems to have passed all or most of the cuts fully.
- Don't know if they use ValEx. Valuation is about 275. All third party costs are at cost.
* $300 is about standard for an exit fee. Also consider other costs involved in switching such as government fees, if you have to go down that path in the future.
* Trusts are important to some and not to others. You'll generally find that online lenders don't deal in trusts, I assume it's due to the complexity and risk.
* Unless the lender is a 'deposit taking institution', then it's not a true offset account, more like a redraw facility designed to look like an offset account. There is a concern that the ATO may treat this type of arrangement differently. There's been plenty of discussion/debate about this in other posts to which have involved representitives from loans.com.au. To date I don't feel the question has been answered to satisfy me that all would be well with the ATO.
* Track record isn't really about how well the passed on the rate cuts for the last 2 years, it's more about the turnover of their products over the last 5+ years. Many securetised lenders have a habit of introducing a product with a killer rate and a guarantee to pass on all rate cuts, which they do. Over time however their funding costs for that product, or that batch of money increases, so they put up the rate over time, even though they still pass on the rate cuts when they happen. MyRate is a lender with a lot of complaints on various forums where this has occurred. It's also happened to a number of other more well known lenders.
* Paying for a valuation at all is unusual these days. Quite a few lenders will charge you a 'settlement fee' of about $200, but that's about as far as it goes. Quite a few lenders advertise that they have no application fees, but they do have other third party costs which they only disclose in the fine print. Often what looks like a cheap entry cost gets expensive without you knowing it.
Unfortuantely as I mentioned previously, asking these questions directly to a lender, isn't going to get a completely honest answer if the answer doesn't make them look good. This sort of information only comes with experience and long term observation.
