businessOwned by: Customer-owned
monetization_onFunded by: Retail deposits and wholesale capital markets
securityLMI Provider: Genworth
account_balanceLender type: Mutual Bank, Customer Owned
Teachers Mutual Bank (TMB) is a customer-owned lender that focuses on the education sector. They have low interest rates and occasional special offers which beat the major banks.
The main problems are that not everyone is eligible to join and they’re not able to service other customer types well, such as business owners.
Don’t assume because you’re a teacher that TMB will offer you the best deal around. Often other lenders have special discounts which beat industry lenders like TMB.
How do Teachers Mutual Bank’s home loans compare?
They’re great at
- Special interest rates if you’re in the education sector
- They often have lower LMI premiums
- Genuine savings not always required
- They often don’t need a valuation for properties up to $1.5 million
- Loan terms of up to 40 years
- Working with mortgage brokers
- Fast loan approvals
- Assessing loans using common sense instead of credit scoring
But they’ve got some drawbacks…
- If you aren’t in the education sector, you can’t be a member!
- Other banks tend to offer better interest rates for larger home loans
- They don’t have a business banking division, and don’t often work with self-employed borrowers
- They’re unlikely to help if you have a bad credit history
- They don’t have a large branch network
Coronavirus / COVID-19: Teachers Mutual Bank policy changes
Teachers Mutual Bank have announced several temporary changes amidst the economic uncertainty due to COVID-19.
- They no longer accept off the plan purchases.
- Commissions/bonuses, overtime, residential rental income are being shaded. E.g. residential rental income (reliance on income from four or more properties for servicing) – 60% of the income from the first 3 properties and 40% thereafter.
- For investment income (i.e interest and dividend income only), they’ll use 50% of the average for the last 2 years in their borrowing power calculation.
Please note that this may change from time to time so please check with us before applying for up to date information.
Coronavirus / COVID-19: Teachers Mutual Bank mortgage relief
Teachers Mutual Bank has announced a number of options for its home loan customers financially affected by COVID-19 due to job loss or reduced income.
TMB home loan customers may be able to:
- Defer their mortgage repayments for three months with a further review after three months (totalling six months). Please note that interest continues to accrue on your home loan during this repayment pause. To apply for a repayment pause of your home loan, please email them at: firstname.lastname@example.org titled ‘Request for Repayment Pause’ and provide your name, your Home Loan account number and the reason why you are requesting a Repayment Pause along with any evidence of your loss of employment or reduced income; or call them on (02) 8831 1919 (Mon-Fri).
- Reduce their monthly repayment amount and retain the same loan term (variable home loans).
- Customers with funds in their redraw can use it to make the minimum repayments (in this case, there’s nothing you need to do), or you can transfer these funds to your savings account to help you through this crisis.
- Customers with an offset account can use the funds in their offset to make the minimum repayments or transfer it to their savings account.
Who is qualified to join TMB?
You can join Teachers Mutual Bank if you’re a family member of an existing member or you work in the education sector.
Eligible education employees include:
- Full time, Part time, Casual or Contract employees
- Teachers and other education sector staff
- Studying Education at University
- School Staff including Government & Private Schools
- TAFE Employees
- University Staff
Eligible family members include:
You’d be surprised to find that most people have a family member in the education sector. Unfortunately if you have Aunts and Uncles that are members you can’t consider them to be family for the purposes of joining TMB.
What home loans types do they have?
TMB has a range of variable rate home loans including their Classic Home Loan which is a basic loan with a low rate and their Solutions Plus Home Loan which is a professional package with bigger discounts for larger loans.
However TMB tends to be most competitive with their fixed rate home loans. Their Fixed Options Home Loan often has the lowest rate on the market and is a good choice if you want the security of locking in your interest rate.
If you’re choosing a variable rate, then in most cases other lenders are comparable to or better than TMB.
Tip for applying with Teachers Mutual Bank
Use TMB’s home loan application form to prepare for your mortgage application.
Note: This is the latest application form as at November 2017. Please refer to Teachers Mutual Bank for their most up-to-date document requirements.
Teachers Mutual have two other divisions
Firefighters Mutual Bank and UniBank are both divisions of TMB and each bank exclusively services specific professionals.
UniBank focuses on staff, students and graduates of Australian universities and their families.
Firefighters Mutual focuses on firefighters, police officers, other emergency workers and volunteers, and their families.
The benefit of UniBank and Firefighters Mutual is that their lending policies are tailored to people that work in that industry so they take a common sense approach to shift work and allowances.
If you are not one of the above professions, you cannot apply for a home loan with these banks.
Teachers Mutual client story: Dean & Anne, NSW
Refinance, equity cash out, gifted deposit.
Dean and Anne wanted to give their kids a headstart in the property market.
Over the past 20 years, their home had grown considerably in value so they decided to cash out some equity to as a gifted deposit.
Both Dean and his wife were full time permanents and were earning strong incomes with no debt except for their mortgage.
They were also refinancing at just over 11% of the property value (LVR), which is considered very low with all lenders.
As strong customers, they were able to refinance their mortgage and cash out $180,000 for their children.
Compare TMB 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.