Rate Money has reduced clawbacks and removed valuation and application fees on its Think Money products for loans up to $2.5 million.
Effective immediately and ongoing for the foreseeable future, the self-employed lending specialist announced there are now no clawbacks on loans held for 12 months and longer.
“People say what’s the catch?” said Rate Money CEO Ryan Gair (pictured above left). “Well, there’s no smoke and mirrors here. We tried to make some changes for the better not just for the broker industry but the customer as well.”
While some think clawbacks are akin to modern slavery, others can understand its benefits.
For Ryan Gair, brokers are the “driving force” behind homeownership for most Australians and they “shouldn’t be penalised” because of the market we’re in and “archaic” clawback structures.
“The reductions to clawbacks on Think Money and our other products, have been made to reward and recognise brokers for the hard work, time and effort they put into supporting Aussies on their pathway to purchasing a home,” said Gair.
Clawbacks have been reduced to 75% for loans held less than nine months and 50% for loans less than 12 months.
Gair said clawbacks have also been abolished completely for the sale of properties through this product line.
“If we have someone that purchases a property and for whatever reason they need to sell after three months, there is no clawback to the broker or our franchisees,” he said.
“You can’t always control your customers’ circumstances. You may have done an amazing job but for whatever reasons their circumstances have changed, or a deal has been stolen from you … Why should you be punished for that?”
As Australians continue to struggle with the cost of living and housing affordability, Rate Money said it made the changes to provide a more transparent and simple home lending solution.
The Think Money product line has also reduced interest rates of up to 0.35% across low doc and 0.20% for full doc loans, and heightened flexibility, such as unrestricted cash withdrawals for business purposes and the ability to settle ATO tax debts.
Gair said with home buyers now needing at least six-figure savings for a standard 20% deposit, “every dollar really does count”.
“On top of the deposit, the fees and costs associated with buying a home make the process complex for buyers and challenging for the brokers supporting them. If you’re self-employed, it can be an even bigger struggle because of the additional ‘proof of income’ hurdles.
“All valuations – even if the lead doesn’t proceed – are free. If you have a $4 million property and the valuer says this is going to cost $2,500 to value that cost is free to the customer.”
Think Money home loans also now offer the freedom of unlimited cash withdrawals for purposes specified up to 80%, validated by an accountant's letter rather than a declaration. Income disclosure is not mandatory, and borrowers can leverage up to 40% of their gross turnover, with instances of utilising up to 75% in the past.
The FBAA acknowledged the significance of fair lending practices and is supportive of these product enhancements, recognising Rate Money's commitment to “fostering transparency and fairness in home lending”.
FBAA managing director Peter White (pictured above right) said Rate Money had taken another “significant step forward” for the industry with these changes to its Think Money product line.
“In a climate where brokers and borrowers face mounting challenges, transparency and equity has never been more critical,” White said.
“These additional changes signal a broader industry shift toward fostering improved communication and relationships between brokers and clients.”
Gair said Rate Money always listened to their partners and clients and was committed to making lending “more transparent and fairer”.
“As we’re non-bank aligned, we can be nimble and respond to market conditions impacting brokers and borrowers by quickly adapting our products,” Gair said.
“If you’re a broker interested in finding out more about our rates or becoming a franchise partner, we want to hear from you.”
The latest move came after Rate Money removed clawbacks for brokers and fees for borrowers on its House Money product line in July.
Available at 32 locations across Australia for at least until next July, House Money covers both full-doc and low-doc owner-occupier and investor loans but operates on different credit guidelines to Think Money.
Within less than four years, Rate Money has grown to 32 locations across Australia, boasts a network of 170 people, and has fulfilled over $5 billion in loans for more than 8,000 clients. The home loan provider has also previously refused to pass full rate rises onto customers in an effort to remain competitive in the market.
In 2022, Rate Money won the Mortgage Manager category in the Mortgage and Finance Association of Australia’s (MFAA) National Excellence Awards and was named 5-star Mortgage Innovator by Australian Broker.
Rate Money has also been named as an excellence awardee for Mortgage Manager of the Year at this year’s Australian Mortgage Awards.
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