flagFounded: 1991, taken over by Westpac in 2008
businessOwned by: Westpac
monetization_onFunded by: Retail deposits and wholesale capital markets
securityLMI Provider: WLMI
account_balanceLender type: Non-Bank that’s owned by a Major Bank
Rams was originally a non-bank lender that ran into trouble during the GFC. It was then purchased by Westpac. They’ve continued to offer home loans catering to self-employed people and first home buyers while Westpac focuses on high net worth clients.
They have some unique home loans and credit policies combined with some good interest rates, which means they are a viable option to the other banks. They’ve got the financial strength of Westpac but they’ve got a higher level of service as their home loan centres are all franchisees.
How do Rams’ home loans compare?
They’re great at
- Customer service – you’re dealing with a franchisee, not a bank employee
- First home buyers
- Competitive low doc loans
- Don’t always require genuine savings
- Special solutions for borrowers with a bad credit history
- Assessing loans using common sense instead of credit scoring
- They’re good at construction loans for builders who are building their own home
- Guarantor loans for first home buyers
But they’ve got some drawbacks…
- Franchisees are mortgage brokers but they tend to recommend Rams over other lenders
- Unlikely to negotiate their interest rates
- Rarely competitive for loans over $1 million
- They don’t deal directly with mortgage brokers so most brokers work with a franchisee
- Their fixed rates are rarely market-leading
- LMI can be expensive
- It’s hard to say what Westpac’s plans are for Rams
What home loans types do they have?
Rams’ Low Rate Home Loan is a basic loan with no monthly fees and few features. It’s best for small loans or investors.
Ram’s Value Advantage Package is similar to a professional package offered by the major banks. You’ll get a tiered interest rate discount depending on the size of your loan and if you’re borrowing over 80% of the property value or not. It’s not bad for loans under $1 million, however other lenders tend to be cheaper for bigger loans.
Rams’ Fixed Rate Home Loan allows you to fix for up to 10 years, which is longer than other lenders but there tends to be a better offer out there.
Rams’ Self Employed Home Loans are a range of low doc loans that enable business owners to provide alternate income evidence when buying a home or refinancing.
A franchisee vs a mortgage broker
Rams home loan centres are franchisees which can cause a conflict of interest. Often after 2 – 3 years, you’ll find your lender has you on a higher interest rate than those that they’re offering to their new customers.
As mortgage brokers this is easy to handle, we can negotiate with the lender. If they won’t offer you a better deal, then we can assist you to refinance. However the franchisees are tied to Rams and it’s a conflict for them to refinance a customer away from Rams to another lender.
So if you choose to go with Rams you need to monitor your home loan rate every year and make sure that you’re getting the best possible deal.
Tip for applying with RAMS
Use RAMS’ Home Loan Application Form to prepare for your home loan application.
Note: This is the latest home loan checklist as at August 2017. Please refer to RAMS for their most up-to-date document requirements.
RAMS client story: Adam, NSW
- To refinance from Pepper to Rams to get a lower interest rate.
Adam is the owner of a small business. For asset protection reasons, his wife is the director of the company while he simply works as an employee.
Unable to provide full financials, Adam was able to apply for a low doc home loan with Pepper at 90% of the property value.
He and his family were able to buy their first home as a result but their interest rate was around 6.1% per annum.
For his $460,000 mortgage, this was amounting to around $2,778 per month in principal and interest repayments.
After a year with Pepper, he was able to pay off a good part of his loan and the market value of Adam’s property also increased, ultimately pushing the Loan to Value Ratio (LVR) of his mortgage to 80%.
By speaking with a broker, he was able to refinance his $448,100 mortgage with RAMS, which offers low doc home loans up to 80% with just an accountant’s letter.
They also don’t charge a risk fee or Lenders Mortgage Insurance (LMI) since they cap their low doc lending to 80% of the property value.
RAMS have one of, if not the best low doc interest rates on the market.
Because Adam was able to reduce his home loan to $448,100, his new interest rate of 5.2% means he is now saving $317 in monthly mortgage repayments.
Compare Rams to other lenders
Not sure which lender is right for you? Our Home Loan Experts can help!
Talk to one of our mortgage brokers by calling us on 1300 889 743 or complete our free assessment form.