Advisers to receive cheap loans

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Financial advisers will be pleased to learn that a specialist bank has reduced the interest rates on its tailored home offering just for them.

Investec Bank is now offering advisers two-year fixed home loan packages at 4.65% per annum (comparison rate 4.79%) and 4.79% for variable rate loans (comparison rate 4.84%).

Head of adviser services Gareth Bird said the rate available is particularly salient considering that the official Reserve Bank interest rates are unlikely to move lower than their current level.

“Our position as a specialist lender allows us to partner with advisers in a way that very few others in the market are able to do,” he said. “We dealt with a very small aspect with adviser community historically, but now with a personalised offering we really are applicable to the entire financial advisory market.”

Over the past five years Bird has seen a big increase in advisers wanting to impact on their client’s financial affairs, from investments to home loans.

Investec is able to offer such a high loan to value ratio (LVR) without charging lenders mortgage insurance because it effectively combines two mortgage loans into one product.

“The first 80% is through our syndicated lending arrangements, either with Adelaide bank or CBA, and then Investec lends the portion above 80% on our own balance sheet at a higher rate,” he said. “If you take that lender rate over a reasonable period of time you can have a better financial outcome than if you pay mortgage insurance.”

Because Investec has been working closely with the clients of financial advisers for the past six years, it has now built up enough understanding to position itself to offer the advisers themselves this personalised banking solution.

Bird said that although it’s still early days, interest in the lower home loan rate from the adviser community has been very good.

“It’s just good for us to spread our message far and wide and get some feedback from the market as to how effective it is,” he said.

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