Non-majors drop interest rates
Online lender Tic:Toc and Teachers Mutual Bank have both announced changes to some of their home loan offerings.
Tic:Toc has dropped its variable rate to 3.57 per cent (3.58 per cent comparison) for new customers (as of 28 September) and is offering its existing customers the same rate on a two-year fixed rate basis (down from 3.64 per cent previously).
Speaking of the change, Tic:Toc’s founder and CEO, Anthony Baum, commented that part of the decision to drop rates had been brought about by the findings of the financial services royal commission.
Mr Baum said: “It’s common practice among the major banks to lower interest rates for new customers while simultaneously hiking rates for existing customers. We were at risk of falling into the same trap, but to us, treating customers in that way isn’t right. We worked with our funder to overcome the usual practices by passing on even more of the cost savings from our digitised process. That means we can provide new customers a reduced variable rate, and our existing customers the same 3.57 per cent interest rate, but as a two-year fixed rate with no fees.
“We have quickly learnt you can’t change an industry overnight, but we are doing what we can, and it’s up to the customer to determine if they are willing to help us.”
“We have been 100 per cent open about the changes in our rates, because unlike the major banks, we don’t want to hide anything.”
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