Anyone's mortgage with uBank? How do they fare?

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  twadds on 14/08/2013 - 01:01

  +2

  • it's a loss leading unsustainable rate:
    I really doubt that the rate is a loss leader. Loans.com.au are offering rates slightly cheaper than Ubank and they are not owned by one of the big 4 that could absorb temporary losses. Mortgage brokers don't like them because they won't pay commissions.

  • leading to possible unresponsive rate adjustments in future:
    They have been in operation for a while and there hasn't been any evidence of this happening so far.

  • fair bit of customer dissatisfaction regarding exit clauses:
    I'm pretty sure this is bs spun by the broker in a desperate bid to talk you into a lender that will pay him a commission.

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  leeroys_dad on 14/08/2013 - 07:24

  +1

  if they do hike the rate, just refinance again. no way would any home loan lender run at a loss. even at 3% they are probably making a killing

  exit clauses are the best they have ever been, so i wouldn't believe his work. treat him like a salesman. do your own research into loans and what he can offer (or she)

  keep in mind that the benefits of an offset account can be for tax purposes e.g. if you don't want to be directly paying off your loan. even though you may get free redraws etc, if you choose to move your money elsewhere and rent out your property, you should not be claiming a tax deduction on the interest for what you previously paid off.

  for me in the long term, better to stick with offset account rather than drop a couple of basis points. i am with Bankwest at 4.99%

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  cuteduck on 14/08/2013 - 08:59

  Mortgage broker = Car salesman

  Ubank, by far is offering one of the best 'no frills' homeloan product on the market.

  leading to possible unresponsive rate adjustments in future —> dodgy tactic by the mortgage broker,
  as no one can control the variable rate, even big 4 will raise the interest rates independently

  Disclaimer: I am not a NAB shareholder

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  schwinn on 14/08/2013 - 10:11

  Thanks twad, bean and duck. I am taking everything he says with a pinch of salt too, as uBank isn't an offering from mortgage brokers, it is clearly in conflict with his interest. Personally I believe uBank run a lean operation which is where they can cut costs to offer more attractive rates.

  Furthermore the effect of me going to uBank is him losing any trailing commissions.

  I've read some comments on previous uBank deals - they look like they've got an OzBargain rep

  Also, on Whirlpool people have given some feedback saying the application process is really slow - I wonder whether that has changed.

  I'm still looking for anyone who actually is/was with uBank, and has something to say.

  • 

    kipps on 14/08/2013 - 15:05

    The other reason why uBank is able to be competitive is due to only funding loans with 80% LVR or better. This avoids LMI and further reduces the lender's risk in the event of default.

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  mick123 on 14/08/2013 - 10:23

  The broker is just trying to get a commission.
  I would go with them but I require an offset account (investment property so I do not want redraw).
  From what I have heard once you get the loan, they are good, but setting up is a headache (slow application process).
  Check if any limit on how much you can deposit in redraw and if any redraw fees

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  webbj on 15/08/2013 - 01:47

  Your broker is potentially going to loose twice, or even three times.

  1st for the loss of the existing trail he will loose from your current loan.
  2nd from the lack of upfront payment and trail commission from a re-finance (to someone other than UBank), and
  3rd from the potential clawback (repayment of initial commission from your first loan) if you are refinancing within a short time (usually the first couple of years)

  Brokers are often a valuable source of information and can sometimes even better bank offerings. That doesn't mean you should take everything they say as gospel obviously, but I wouldn't dismiss it outright either.

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  DrG on 31/08/2016 - 16:17

  Hi,

  I'm a mortgage broker and recently came up against UBank.

  I'm unsure about the reasoning behind the broker's arguments above. What I can say is that UBank does indeed offer some excellent rates. They save on costs that come with having branches etc.

  But there'd be other reasons for this, for example they may have strict deposit and security requirements, or may not offer features such as offset or redraw (if needed), their policy overall may make it difficult for most people and actually get that rate and loan approved. However, if it were me and I ticked all the boxes, I may consider it. Who doesn't want to save.

  In defense of the broker, aside from the fact that it's normal for anyone wanting to sell their services, the main reason a broker wouldn't recommend a bank not on their panel (more so than commission), is simply because we're not allowed to. I could never advise anyone to go with a lender that I wasn't accredited with, because it would be against responsible lending laws. Commission, at least for me, is on the very bottom of my list.

  I think it's more about relationship. A customer may decide to go with me simply because of our good relationship and that I've been there whenever they needed me. I would't try knock down the competitor either, rather I'd focus on the positives of what I can offer.

  Not all brokers are "car salesmen", not all brokers are commission obsessed greedy tyrants trying to make as much as possible.

  If you feel this way about a broker, just don't ever use one to start with. Otherwise, many of them charge $0 for their service and you can tap into multiple lenders through one professional… hello!!