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Credit union home loans
Credit unions are financial institutions that are owned by members, not shareholders. They offer home loans that are often quite competitive versus the banks and are regulated in the same way.
Credit unions are smaller, customer-owned financial institutions operating in towns, cities and regions across Australia. For home buyers and property investors, getting a credit union home loan means banking locally and avoiding the Big Four banks while still getting a good deal on a home loan.
Because credit unions are smaller operations, it's a good idea to research one thoroughly before becoming a customer. But that's true of any financial institution.
Comparing credit union home loans
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Bank loans vs credit union home loans
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To get more information about the various customer-owned banks (including credit unions, mutual banks and building societies), check out the Customer Owned Banking Association website. Of those, 76 are credit unions. There are plenty to choose from.
What are the benefits of getting a home loan with a credit union?
If you want to support a local institution rather than one of the Big Four banks, then a credit union is probably your best bet. It's the financial equivalent of shopping local.
The fact that credit unions often put money into local community projects and charities is another benefit.
Credit unions are run on behalf of their members. And many credit unions started out by servicing specific areas or specific professions. If you're a teacher, for example, you may find a teacher-specific credit union offers extra benefits suited to your work and finances.
Will I get a good rate?
Credit unions vary widely. Some of them offer very low rates that compete with the cheapest lenders on the market. And some simply don't. You really need to compare home loan rates and make sure you're getting a good deal.
How do I find the best credit union for me?
Finding the best credit union is a personal decision based on your needs and goals. The best credit union for a retiree in Newcastle could look quite different to the needs of a young property investor living in Townsville.
To find the credit union that works best for you, ask yourself the following questions:
- Does it have the products you need? Some credit unions offer an extensive suite of financial products, from credit cards to home loans to insurance. Others may offer a more limited set of banking services with only a few home loans to choose from.
- Does the credit union operate where you live? Some credit unions only operate in one town or city. You don't need to be living there to bank with them, of course. But if you want personalised in-branch customer service, you want to find a credit union where you live.
- How does the credit union support the community and its members? Consider the credit union's community work, the projects it supports and the benefits it offers to members.
- Customer reviews. Reviews from existing customers is a good way to gauge how good a credit union is, especially in terms of customer service.
Can I get a lower home loan rate with a credit union?
At Finder we track the market's lowest home loan rates every month. And lately, most lenders are offering quite competitive rates. There's very little distance between the Big Four banks, online lenders and credit unions.
We frequently find credit unions and small lenders offering some of the lowest rates around.
Getting a loan with a credit union doesn't mean you're guaranteed to get a better deal, but it doesn't mean you're missing out either. Once again, you need to compare and make sure you're getting a good rate.
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