Credit Union Home Loans
Credit unions are a great alternative to banking institutions that are geared more towards profit than customer satisfaction. When you are shopping around for the best mortgage deals, look at credit union home loans as well. You may find that the home loan you are looking for is with one of the leading credit union home loan providers. Credit unions, mutual banks and building societies are Authorised Deposit taking Institutions, otherwise knows as ADI’s, and comply with extensive Australian government regulation that is exactly the same as it is for publicly listed banks. 4.6 million Australians currently bank with a credit union or building society.
Bank Loans Versus Credit Union Home Loans
A lot of people do not understand the difference between credit unions and banks. There are two major distinctions that can be made between the two.
1. Not-for-Profit
The interest rates are usually significantly lower for credit union home loans than they are for the banks. You can also expect to pay less fees, and the fees that you do have to pay are often much lower than what you would pay on a bank loan. Credit unions share the benefits of ownership via better rates, fairer fees and quality personalised service. Bank profits are distributed amongst its stakeholders and shareholders in the form of dividends. Furthermore, banks are continually adding new fees and updating policies to increase their bottom line. This means that credit union home loans tend to be much cheaper than bank loans when everything is taken into consideration. This was supported by a 2008 study by ASIC which found that mutuals on average charge the lowest overall loan fees in the market.
2. Credit Unions are Owned by the Members
Anyone that is a member with a credit union and has an account is a part owner. This means that your status as a customer is highly regarded and you are treated more as a customer than merely a source of profit. If it any time you have a question about a credit union home loan you won’t have to feel intimidated when you’re talking to a loans officer.
When you deposit money into your account at a credit union the deposit is referred to as a share. This is due to the fact that the money deposited represents an ownership in the union. It’s much like owning a share of the stock in a company. This deposit allows you to have to say in the running of the credit union.
Featured Credit Union Home Loan
Apply for a Easy Street Honeymoon Home Loan and enjoy no annual fees, no account keeping fees, 100% offset account, an unlimited redraw facility and the ability to make additional repayments.
- Interest Rate of 5.89%
- Comparison Rate of 6.56%
- Application Fee of $500
- Maximum LVR With LMI: 95%
- Minimum Borrowing: $100,000
- Maximum Borrowing: $2,500,000
Featured Credit Union Home Loan
| Home Loan | Details | Interest Rate (p.a.) | Comp Rate^ (p.a.) | App Fee / Ongoing Fee | Max LVR | Min & Max Borrowing | |
|---|---|---|---|---|---|---|---|
 Easy Street Honeymoon Home Loan Special |
A low application fee, plus get a discounted fixed interest rate for the first 12 months while you settle in to your new loan | 5.89% | 6.56% | $500 / $0 | 95% | $100,000 / $2,500,000 |
 
|
Easy Street Easy Home Loan – 2 Year Fixed Rate |
Apply for an Easy Street fixed rate home loan and get a competitive loan with a fixed interest rate. | 6.29% | 6.57% | $500 / $0 | 95% | $100,000 / $0 |
|
 Community First Honeymoon Home Loan |
A low fixed rate home loan for the first 12 months with no annual fee, no account keeping fee. | 5.89% | 7.32% | $500 / $0 | 80% | $50,000 / $1,000,000 |
|
Community First True Basic Home Loan |
Community First lowest ongoing variable rate. An easy to manage loan with no account keeping fees. | 6.84% | 6.92% | $500 / $0 | 95% | $100,000 / $1,000,000 |
|
Community First Fixed Home Loan – 3 Year Fixed Rate |
A fixed rate home loan that allows you to make additional repayments during the fixed period and access to an unlimited redraw facility with no minimum redraw amount. | 6.29% | 7.37% | $500 / $0 | 95% | $100,000 / $1,000,000 |
|
Saving Money With Credit Unions
You can save a lot of money by signing up for credit union home loans, and you can also save by using a credit union for your regular banking. The underlying difference between credit unions and banks is that credit unions are publicly listed and hence do not need to maximise their profits to benefit shareholders. This is seen with the ongoing interest rate rises by the major banks, leading many Australians to switch their home loan to a non-bank lender or credit union. Credit Unions are dedicated to putting their profits back into more competitive rates, lower fees and excellent customer service. Each Credit Union will work hard to tailor each of their products and pricing to suit the needs of their members. By not being driven by profit, credit unions exist for their members.
How to Become a Credit Union Member
If you are in the market for a new mortgage and are considering credit union home loans you will need to apply for membership before you can apply for one. Since credit unions have specific membership requirements, it is best to consider a few different unions that will accept you based on where you live, your associations and other affiliations. Once you have joined, you can submit a home loan application.
Membership requirements depend on the criteria set up by each individual credit union. A credit union has to limit their services to individuals that have a common bond. Examples of these bonds include a religion, a place of employment or being a resident of a certain geographic community. A credit union cannot allow anybody to join and use its services. If it does not restrict its membership to people with a common bond it can lose its status. Once you have joined, however, you might be allowed to use another branch with a credit union in a different area by using a CU service center.
How to Use a CU Service Center
A CU service center is a part of a credit union network. As long as your credit union belongs to that network, you can use one of the branches.
This makes having credit union home loans even easier. If you have to make a payment or want an update and are out of town, you can walk into the credit Union branch and do business as normal. If you need any help while you are there you can request it and you don’t have to feel awkward at all since the staff and the tellers are quite used to serving people that deal with another credit union. You can even use a drive through window to do your business.
You’ll have to bring along some ID and your account number. You’ll also have to let the employee know the name of the credit union you frequent. You’ll be able to do most of your business at a service center but there may be some services that you can’t use. If you need to close an account or request checks, for instance, these may not be accessible.
Once you have found a credit union you’d like to join you’ll need to go to a branch and apply. You should bring along some ID such as a drivers license and be prepared to pay a small deposit in order to join the membership. Usually you will have to pay about $25 to become a member.
You will then have to deposit a check or cash to open up the account. Some credit unions require that a minimum balance be maintained as long as you are a member. You should find out about this when you join.
Like a bank, a credit union can do a credit check on you if you are interested in a debit card or opening a checking account. Once you have become a member, you can make use of any of the services and products provided.
Products Offered
In most cases you will have access to the same type of services that you would have at a bank. A credit union has the right to offer the services and products that it wants, so there is no guarantee that every service will be available at the credit union you choose. If you are looking for a select product or service you should find out if it is available before becoming a member.
Banks can offer promotional products to lure in more customers based on volume. Banks serve a lot more customers than credit unions and can offer certain deals that a credit union may not be able to afford. Credit unions will usually offer only the services and products that a majority of the membership will want to use.
Credit Union Safety
You can rest assured that any money deposited or any loans taken out with a credit union are as safe as they would be if you dealt with a bank. If something were to happen to the institution, all or some of your money would be guaranteed by the government.
Credit Unions
It is very easy and quick to apply for credit union home loans. You will have to prove that you are worthy of the credit and will have no problem repaying the loan. If it is not approved, you’ll have the option of asking a friend or relative to co-sign the loan for you.
When you are shopping around for mortgages, don’t forget about credit unions and what they have to offer. You are not limited to dealing with the big banks only. Credit unions have a lot to offer to their members and can usually give you a better deal on interest, fees and penalties.
Find out which credit unions would accept you as a member and then learn more about the home loans they offer. If you are able to join three different credit unions, for example, you should do a price comparison between all of the credit union home loans. There will be a difference between these loans, just like there will be a difference between loans offered at different banks. Don’t assume that finding a good deal at one credit union means that you have found the best deal. A home loan is a long-term investment and even a slight difference between interest rates can add up to thousands of dollars over the course of 15 or 30 years.
Personalized Service
When you’re a member at a credit union your service will be more personalized and less formal than what you may be used to. If you prefer to deal with an official in a business suit without the added touch of personal flavor, you would be best sticking to a bank. If you like the idea of being treated more as a person when you’re dealing with financial matters, a credit union would be best suited for you.
You will get to know the people that work at the credit union very well since there will be less employees due to a lower volume of customers. This can work in your favor since your history and dealings with the credit union will play a larger role than they would with a bank. If you are applying for credit union home loans and have been a member for quite a while with good standing, you’ll have a better chance of getting a loan if you are borderline between a yes and a no answer. Banks usually deal with a borderline case by saying no, even if you have had a good banking record with them in the past.
Credit union home loans are your alternative when you are fed up with the banking institution and are looking for the best deal. Remember to compare home loan prices at a credit union before signing on the dotted line for a mortgage at a bank. You may be leaving money on the table by not examining all your choices carefully.
A full banking review is something that has been discussed many a time, but recently another possible solution to some of the problems has been brought to the medias attention.
The Big 4
In the wake of the financial unrest in the country, a number of the major banks did nothing but cause absolute fury among consumers by hiking their rates the second the reserve bank had to increase the base rate for the first time in a while.
Instead of doing their bit to help struggling customers, they also raised rates, and many took the view that they saw it as another money grabbing opportunity. It is certainly fair to say that they behaved in a rather unsympathetic way. Unfortunately it is not the first time the big 4 have been cited for “greedy” tactics. Many feeling their desire to lend money to as many people as they could was one of the main causes of economic trouble in the country.
So how can these big banks keep treating customers as if they are being held to ransom? Is it to do merely with their size? Or is it because they feel there is no competition for them?
Well, if people pay attention to what we are about to say, that could all change in the near future.
Credit Unions and Building Societies
Wayne Swan, the country’s Federal Treasurer has called for people to start looking for alternatives to the big 4. Those alternatives come in the form of credit unions and building societies.
The main differences between the banks, and the credit unions is that the unions are customer owned. They are run by members, and not a private company whose sole goal is profit. Some of the building societies and unions still remain small fry in the finance sector because many people are not aware of the full range of products available from them.
Many people associate them with saving accounts rather than lending. However that could not be further from the truth. Not only can you get a personal loan from the unions, but you can also get home loans as well!
Not only do you have access to these products, but in many cases they offer a much better rate than the big banks. For example, it has been said that you could find yourself 100 basis points better off on your home loan vs one of the big 4.
By creating more competition for the bigger banks, they will eventually have to drop their rates or risk losing business. Whilst they feel they are the only option for borrowers they will keep getting away with their hiked prices.
Safe and Regulated
When asked, one reason some Australians were nervous about getting a loan from a building society or union was security. Some were concerned about their rights, and whether these companies were regulated.
The good news is that they are regulated and supervised in exactly the same way as the big banks so you are perfectly safe borrowing money from them. Your rights are exactly the same, and you are protected from any unruly practices.
If you have not yet looked at what the mutual sector has to offer, then I urge you to take a look. You may be surprised, and even better, it may force the big boys to rethink their strategy.
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