Gateway Credit Union Home Loans Review
Owned by: Customer owned
Funded by: Retail deposits and wholesale capital markets
LMI provider: Genworth
Lender type: Credit Union
Gateway Credit Union (GCU) is a great option for people who want a lender that’s going to care about them and operate for their benefit not the benefit of its shareholders.
Gateway is customer-owned, which means that their profits get returned to you as a better home loan interest rate and lower fees.
In addition to this, Gateway also has an exceptional level of customer service and a few policy quirks that can help customers that may not fit with the major banks.
How do Gateway Credit Union’s home loans compare?
They’re great at
- Customer service
- Offering lower interest rates if you have a large deposit
- First home buyers with small deposits
- Financing the construction of a duplex
- Unusual property types such as studio apartments, warehouse conversions and small blocks of units
- Fast loan approvals
- Family Pledge Loans for first home buyers
- People who want branch access
- Working with mortgage brokers
But they’ve got some drawbacks…
- Strict lending policy regarding income and employment
- They’re not experts in construction loans
- They’re much smaller than other credit unions such as CUA
- Self-employed borrowers who cannot prove their income
- They don’t use credit scoring but if you borrow over 80%, their LMI provider will, so you may get declined for no apparent reason
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What home loans types do they have?
Gateway has a large number of home loans available but only two or three of them are actually popular with customers.
Their Premium Package Home Loan competes with the professional packages offered by the major banks. It has a discounted rate and benefits on other banking products in return for paying an annual fee which is a little cheaper than the annual fee that you’d pay with a major bank.
Their Fixed Rate Home Loan allows you to fix for 1, 2 or 3 years. Interestingly, they don’t offer a 5 year fixed rate which is used by many people when rates are at all-time lows. That being said, their 3 year fixed rate tends to be one of the cheapest on the market or quite close to it.
Their Family Pledge Home Loan allows you to buy a home with no deposit as long as you have a guarantee from your parents. This is a great way to get into the market, avoid paying LMI and get a sharp interest rate as well.
Is customer-owned banking all it’s cracked up to be?
Yes! If you want to work with a company that isn’t trying to squeeze every dollar out of you, then you should definitely consider a lender like Gateway or other customer-owned financial services companies.
The major banks have an advantage in that their scale, branch network and systems allows them to offer some great deals and competitive lending policies. But ultimately they’re going to play games with your interest rate and you have to monitor it all the time to make sure you don’t get ripped off.
Are you eligible to become a member?
Unlike other credit unions, anybody can become a member of Gateway. All you need to do is get identified and pay a nominal fee for a share subscription.
Gateway Credit Union client story: Anthony, NSW
- To by his first investment property.
Having gone through the emotional heartache of separation, Anthony and his wife were able to remain civil and each party was paid out for their half of the home they owned together.
With a decent settlement payout, Anthony decided it was as good a time as any to buy his first investment property.
Guildford (west of Sydney) was running hot at the time but Anthony found himself missing out on a few golden investment opportunities because he didn’t have a pre-approval.
With a great deposit and earning a good income, Anthony didn’t want to pay through the nose for a home loan so he contacted a mortgage broker who was able to place him with Gateway Credit Union.
At the time, the credit union was able to offer him one of the lowest variable rates on the market because he was able to provide full income evidence and he was borrowing less than 80% of the property value (LVR).
Known for their great customer service, GCU was able to quickly turnaround a pre-approval and Anthony was able to get his foot into property investment with a modest 3-bedroom house.
Compare Gateway to other lenders
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