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A new online broker promises to revolutionise the home loan business by helping customers secure commission-free mortgages at wholesale rates.
BIDeloan said that through its product, borrowers can save nearly $105,000 over the term of a 30-year $500,000 loan.
Instead of charging upfront and ongoing commissions, the startup takes a one-off fee, which the customer chooses through an auction.
Every week, company will hold an online auction where borrowers can bid for the fee they wish to pay for BIDeloan’s services. Bidding starts at $799 and goes up to the ‘Buy it Now’ price of $1,799.
The company opened its first live online auction yesterday (12 February). It said that borrowers are charged a one-off fee only if their loans settle.
“We’ve reinvented the way customers refinance their home loans, seeing customers leave behind the average bank loan for a low rate, commission-free and cutting-edge mortgage product that is still funded by major Australian lenders – and the customer is the standout winner,” said BIDeloan CEO Dan Webb.
Australian Broker has learned that the company has only one lender so far, non-bank RESIMAC Limited.
“Funding options are always open for consideration,” said Webb when asked if the company is adding other lenders to its panel.
He said that based on his company’s variable rate of 3.49% (with a comparison rate of 3.51% based on a $150,000 loan over 25 years) against a standard bank customer on 4.5%, the customer could save about $100,000 on a $500,000 loan over a 30-year term.
“And the rate is even lower for an investor refinancing their home and investment loans,” said Webb.
After bidding for a fee, a customer is offered a number of home loans at wholesale interest rates, with the BIDeloan team assisting with the mortgage application.
Borrowers may apply for housing loans – for refinancing, home buying, or investment – up to a maximum of $1.5m.
“We deliver our services online, removing the ‘middle man’ and all the associated on-costs from the process, before providing the customer with quick application turnaround times and a simple, easy-to-understand product,” said Webb.
