InfoChoice’s review of the UBank UHomeLoan
Even among a landscape of quite a few sub–2.5 per cent p.a. home loans on the Australian market, the UBank UHomeLoan stands out for its combination of features and 2.49 per cent p.a comparison rate. interest rate.
It’s an award–winning home loan product, having picked up Money Magazine’s Best of the Best and the Cheapest Three–Year Fixed Home Loan accolades in 2019.
This is all well and good, but is this mortgage right for you and what can it actually do for you if you take it on?
Home loan fast facts
- The UBank UHomeLoan is a principal and interest (P&I) product for owner–occupier borrowers with investment and Interest Only options available.
- The loan amounts available range from $200,000 to $9,999,999
- The terms available range from one year to 30 years, and
- The maximum loan–to–value is 80 per cent, so you’ll need a deposit of at least 20 per cent.
The mortgage that does what it says on the tin
If you’re a savvy consumer and you use InfoChoice a lot to compare deals, you’ll look at the comparison rate before you look at the headline rate. With the UHomeLoan you’ll see that these two rates are the same.
This means that there are minimal fees or charges involved with this home loan. Many mortgages on the market in Australia have application fees, establishment fees, early break fees and even monthly account–keeping fees. All of these additional charges bump up the actual cost of the loan, which is reflected in the comparison rate.
With no application or ongoing fees plus a sharp interest rate, this mortgage could work out quite cheaply for you.
You can make early repayments without penalties
The UHomeLoan allows you to make extra payments on your mortgage so that you’re reducing the principal amount faster. Some home loans don’t have this facility, or might charge you a fee for making overpayments above a certain amount each year.
This product lets you make as many overpayments as you’d like without penalty and you can also redraw the extra money if you ever need to.
A worked example of overpayments
To see the impact that overpayments can have on the total eventual cost of your home loan, use an overpayment calculator or check out this example.
A borrower takes out a UBank UHomeLoan mortgage of $518,500 for 30 years. With the interest rate of 2.49 p.a. this means that the monthly repayments are $2,046, leading to a total repayment of $736,563.
If the borrower decides to make a monthly overpayment of $200, then the mortgage would be paid off three years and nine months earlier. This is a saving of $30,000 over the lifetime of the mortgage.
UHomeLoan does not offer an offset account facility, however, it features an unlimited redraw and split loan flexiblitity.
You can split the loan between fixed rate and variable rate portions
This facility gives you the best of both worlds as the fixed interest portion of the home loan will be protected from any rate rises while the variable portion will benefit from any future cuts to the cash rate. You don’t have to use a strict 50–50 split; you can customise your loan structure according to your needs and preferences.
Quick application process: – first step could be completed in under 15 minutes.
Local support –Australian based experts to guide you through every step.
Loyalty Discount – 0.10% p.a. loyalty discount is applied after you’ve held the loans for 3 consecutive years.
Stability: UBank is an online bank that forms a division of National Australia Bank Limited.
Security – Ubank is backed by Australian Government Guarantee. You can be confident that your money is in safe hands.
The UHomeLoan lets you choose your payment frequency
You don’t have to pay your home loan once a month. You can decide to pay fortnightly or even weekly. By increasing the frequency of your payments, you pay down your loan faster.
The UHomeLoan is an excellent all–round home loan with enough features and flexibility to make it a long–term prospect for borrowers looking for a relatively low–cost, no fee mortgage deal. Compare full features, fees and rates of the award winning UHomeLoan.