AMP is one of Australia’s largest financial service companies and is known for having one of the largest financial advisor networks.
However, surprisingly, only a few Aussies apply for a home loan directly with AMP. Most of its customers come directly through its mortgage broker partners and financial planner network.
AMP offers competitive interest rates, smart lending policies, and innovative home loans, which makes it as popular as other major banks for certain consumers.
The question is, will AMP Home loans be right for you?
Let’s take a look at some of the benefits of choosing AMP and what it can offer.
Table of Contents
What are AMP Home Loans like?
The top 5 things AMP are good at:
- Approved Master Limit: This allows you to get an approved line of credit with a maximum limit, giving you a choice to add or close multiple accounts within that specified limit. It is a great option for investors who have many sub-accounts and wish to have an approved master limit. For example, if you are approved for a loan up to $500,000, you can switch sub-accounts to $250k/$250k or $100k/$400k with just a simple phone call.Â
- Less Focus on Credit Scoring: When assessing a loan application, AMP takes a lot of factors into consideration instead of focusing only on giving you a credit score. In other words, it uses common sense while assessing an application and keeps all the factors in mind. Note that this refers to the bank’s own way of assessing your credit and is not related to your bad credit.Â
- Working with a Mortgage Broker: AMP is working with a large number of mortgage brokers. Therefore, if you are applying for a home loan via a mortgage broker, it is pretty likely that the broker is accredited with AMP, which would improve your chances of getting an approval.
Repayment Holidays: As a fairly unique feature, AMP offers their mortgage safety net as a part of their home loan products. This allows you to suspend repayments for up to 6 months and capitalise interest to the loan for that period. It can help manage your cash flow and is mostly designed for anyone facing an involuntary redundancy. For example, it was recently offered to those affected by Covid-19.
The top 5 things AMP aren’t so good at:
- Bad credit: Amp doesn’t usually approve a loan application for those with a bad credit history, so If you have a bad credit history, it is less likely that you will qualify for a home loan. If you have bad credit, try improving your record to secure a home loan.
- Over 90% LVR borrowing: If you need to borrow over 90 % of the property price, you might not be able to get loan approval from AMP. So AMP is not the right choice for those without a big deposit. Â
- Fairly strict property policies: Being a smaller bank, it doesn’t quite have the risk appetite as some of the larger players, so if you have a unique property or something on larger land, you might have trouble getting your loan approved with AMP.Â
- No branches: Similar to ING and other smaller banks, AMP does not have any branches across Australia. So, while they have fairly good internet banking, if you need to bank a cheque, you will need to do so via Australia Post.Â
- Not for self-employed Individuals: Are you self-employed and looking for a home loan? If so, AMP may not be the right option for you because it won’t offer loans to self-employed individuals if you don’t have sufficient proof of income.
What different home loan types does AMP offer?
AMP offers a wide range of home loan packages suitable for different types of borrowers with different loan requirements. They have a professional package, a basic home loan package, and an essential home loan.
In addition, they also have a package called SuperEdge cash account, which is suitable for borrowers who want to purchase a house with their self-managed superannuation fund.
What sets AMP apart from other financial institutions is its Master Limit feature on a home loan, which allows you to get an approved line of credit with a maximum limit. As a borrower, it gives you the option to add or close accounts within that specified limit for up to 10 years. It is an outstanding feature for investors who sell or purchase properties regularly.
1. Professional Package Home Loan
This home loan package is available for both professionals and those who just want more features. You can choose if you’d like a fixed or variable rate, and the loan can be split between accounts.Â
The Professional Package has the following features.
- Variable, fixed rate or line or credit available
- Other banks can be linked to your loan
- Not just for professionals
- 100% offset account with variable rate loan
- Loan size from $100,000 to $2,000,000
- Line of credit: $349 annual Package fee
- Variable rate(i) loan: $349 annual Package fee
2. AMP Essential Home Loan
This basic home loan offering is a simple, no-frills option.
- Competitive variable rates and no monthly fees
- Additional repayments at any time
- Free redraw facility
- No ongoing fees
- Loan size from $100,000 to $1,800,000
- No fixed rate option or line of credit available
- No offset account availableÂ
3. Basic package
As the name suggests, this one is the most basic option of them all but gives the applicant a choice between fixed or variable rates.
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- Fixed or variable rate options
- No monthly fees
- Optional Offset deposit account with basic variable rate loan
- Redraw facility
- Unlimited extra repayments with the variable rate.
- No establishment fees on home loans up to 90% LVR
- True flexibility with up to 10 account splits at fixed or variable rates.
- Loan size from $40,000 to $1,800,000
- No line of credit available
- $250 settlement fee
4. SuperEdge Cash Account
The AMP SuperEdge Cash Account is a great way to manage your SMSF’s cash flow with a competitive interest rate and access to your money. You’ll gain flexibility towards how you deposit and withdraw your money, and it also acts as an everyday account that earns interest.
- Interest is calculated daily and paid monthly.
- 24-hour access
- No account fees.
- Only SMSF trustees or SMSF pensioners are eligible to open one.
- No Visa Debit card or digital wallet facilities
- Cannot make same-day payments to an external account
What documents does AMP need for a home loan?
AMP’s application is fairly standard compared to most banks. Assuming you are a salaried employee and you are purchasing your first home, they would ask for the following:
- Signed Application Form and Privacy Act form completed by all borrowers
- Identification documents: Current Medicare + Drivers license or Australian passport
- 2 most recent consecutive payslips inclusive of YTD; (minimum of 3 months year to date (YTD) income & tax figures) and tax return or PAYG summary (other options stated on the document too).
- 3 Months’ statements showing all continuing liabilities – i.e. any open credit card, personal loan, store card or overdraft statements
- Savings pattern (Applicable when LVR > 90%) – Established over 3 month period with regular deposits or from shares, real estate or other. 2 most recent computer-generated payslips
- Evidence of your Genuine Savings, being statements to show the funds have been held for more than 3 months.
- Signed Contract of Sale
- All Personal Loan and Credit Card refinancing and/or debt consolidation – 1 months statements (<30 days old\
Self-employed (sole trader/ partnership/company/ trust income)Â
- Minimum self-employed period 2 years – All applicants (including directors and trustees) must provide personal/company tax returns for the previous 2 years and a minimum of one financial year’s.
- Tax Assessment Notice for each income source – Balance Sheets and Profit and Loss Statements must be provided for the previous 2 years.
- Income projections and cash flow forecasts or income from a business being purchased are not acceptable for serviceability assessment.
- If income from the latest financial year has increased by less than or equal to 20% of the previous year, then the latest year’s income is used.
- If income from the latest financial year is more than 20% of the previous year, then a maximum of 120% of the previous year’s income is used.
- If income from the latest financial year is less than the previous year, the lower of the 2 figures is used.
What else does AMP offer?
In addition to home loans, AMP also offers the following products:
- SuperannuationÂ
- Amp Pension
- Term Deposits
- SMSF bank accounts
- Investments
Amp also offers financial advice through its network of financial advisers.
What are some of AMP’s customer reviews?
AMP’s customer satisfaction is pretty standard at 71% and slightly below the major banks, whose customers rate them at 64%. Customers were satisfied with all of its services, with nothing really standing out.
How does AMP compare to other lenders?
Since a large number of brokers are accredited with AMP, the best way to apply for its home loans is via a mortgage broker.
It is important to know that AMP has its own network of financial advisers who are less likely to compare their products with other lenders. This limits your search for a suitable package because you are never sure you are securing the best deal.
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Speak to our team to find the best deals. We compare different lenders using different parameters while keeping your financial goals in mind.Â
Next steps and getting your home loan
Our team at Hunter Galloway is here to help you buy a home in Australia. Unlike other mortgage brokers who are just one-person operations, we have an entire team of experts dedicated to helping make your home loan journey as simple as possible.
If you want to get started, please call on 1300 088 065 or book a free assessment online to see how we can help.
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