Self-employed lending specialist Rate Money has announced a new product line that has no fees for borrowers and no clawbacks for brokers.
The new product line, Rate Money House Money, is available from July 3 and covers both full-doc and low-doc owner-occupier and investor loans and is available at 30 locations across Australia.
Welcomed by the FBAA, the announcement comes at a time where brokers are experiencing a rise in clawbacks due to increased refinancing levels and cashback offers from banks.
Data from the FBAA between 2018 and 2021 found lender cashback incentives had risen by 59.1%. The research also found the average annual clawback value per annum to a broker had surged by 47.4% over three years from $10,229 in 2018 to $15,077 in 2021.
Rate Money CEO Ryan Gair (pictured above left) said the home lending sector should not be about profiteering and instead should be about transparency and working towards customers’ best interests without it being detrimental for brokers.
“We’re incredibly excited to offer this industry-first product line in response to the challenges brokers are facing, ensuring brokers are adequately rewarded for their hard work,” Gair said.
“We have seen others in the industry offer no clawback ‘lite’ products, but these have come with a rise in risk fees which negate the benefit of no clawbacks. We have thrown it all out the window for this offering to provide a true no strings attached product line.”
Rate Money will not charge any borrower fees, which includes risk, application and valuation fees.
The lender said the FBAA had recognised the importance of fair lending practices and believed that the company’s new offering set a precedent for the entire industry.
Peter White, managing director of the FBAA (pictured above right), said as banks increasingly offered incentives that drover borrowers to refinance, many mortgage brokers had felt the brunt of the cost.
“We applaud Rate Money for their commitment to fair and transparent outcomes for all and recognise that this is a significant step forward for the industry as it acts in the best interest of the consumer,” White said. “We want to see other lenders adopt a similar approach.”
Launched in 2019, Rate Money now has a network of more than 170 people and has settled more than $5 billion in loans in the space of four years for more than 8,000 clients.
The lender 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 Awards and was named a 5-star Mortgage Innovator by Australian Broker.