Gateway Credit Union Home Loan Review

Gateway Credit Union, also known as GCU or Gateway Bank is different to most banks because it is customer owned, meaning their profits get returned to you as a member rather than as profits to shareholders – but how do their home loans compare?

The benefit of this is sometimes better home loan interest rates and lower fees when compared to most banks because credit unions operate for the benefit of their members, not shareholders. This also can translate to better customer service as the members of a credit union are also the owners of that credit union!

Today we review Gateway Bank (formally Gateway Credit Unions) home loans and put them through their paces.

Edit: Gateway Credit Union is now known as Gateway Bank. 

gateway credit union

 

What are Gateway Credit Union’s Home Loans like?

Top 5 things Gateway Credit Union are good at:

  • Higher Customer Satisfaction: Gateway Credit Union Members gave the bank high scores for service, friendliness and responsiveness with overall member satisfaction score of 87% (average Big 4 Bank Net Promoter Score was 78.50% in May 2018).
  • Lower Interest Rates for large deposit Loans: As Gateway Credit union is member-owned they are able to offer lower interest rates for higher deposit loans, including special variable rates on loans with a 20% deposit from 3.69% (as at 23 November 2018).
  • ✅ Award-winning Home Loan Products: They have recently won Canstar’s Outstanding Value award for both their Investor Variable Home Loan and Owner Occupied Variable Home Loan, as well as winning Mozo’s Expert Choice award in 2017 for Australia’s best credit union.
  • Guarantor Home Loans for First Home Buyers: Gateway call this a Family Pledge home loan product, it allows you to borrow up to 105% of the property purchase price to cover settlement costs and stamp duty.
  • Unique property types like studio apartments, granny flats and small blocks of units. If you are buying a property with a granny flat they will consider using the income from the granny flat provided you give 2 years tax returns and current rental agreement.

 

gateway awards

Top 5 things Gateway Credit Union aren’t so good at:

  • ⛔️ Tougher credit criteria: They can be much more strict around your type of employment, and how they check your income. For example, Gateway will phone your employer and complete an employment check if you have less than 20% deposit.
  • ⛔️ Construction Loans: While Gateway can do construction loans, they aren’t the best due to their progress payment process and limitations in not accepting owner-builders.
  • ⛔️ Smaller Size: Gateway currently has over 40,000 members which are considerably less than other credit unions like CUA which had 453,122 members at the end of 2017.
  • ⛔️ Self-employed customersIf you are self-employed Gateway isn’t as good as some of the other banks, they will need your last 2 years tax returns and ATO notices of assessment (compared to some banks which only need 1 year).
  • ⛔️ People with bad credit: although Gateway credit union do not use credit score their Lenders mortgage insurance provider does so you could get your loan declined if you have less than 20% deposit.

What are the different home loan products they offer?

Gateway Credit Union has a wide range of Home Loan products and the four most popular include:

1. Premium Package Home Loan

The Gateway Bank Premium Package Home Loan is similar to professional package home loans that are offered by many of Australia’s banks. In short, you get a discounted rate and other banking products packaged under one annual fee.

The annual package fee is slightly lower than the major banks being only $299 per year, and that includes benefits like:

  • ✅ Free loan Variation
  • ✅ Earning an extra 0.10% on your term deposit accounts
  • ✅ 10% discount off CGU General Insurance
  • ✅ 100% Loan Offset Account
  • ✅ Higher discounts if you have a larger deposit (more than 20%)
gateway Home_Loan_Interest_Rates

Interest rates correct as at 23 November 2018 and subject to change without any further notification. They are based on owner-occupied P&I repayments see Gateway Bank for full terms and conditions.

2. Fixed Rate Home Loan

Gateway’s Fixed Rate Home Loan product helps protect you against interest rate rises, giving you a fixed term between 1 to 5 years where you can lock in your interest rate repayments. It also has a rate lock feature, which secures your fixed rate for up to 90 days before you settle.

The benefits of their Fixed Rate Home Loan include no annual fees, or administration fees (aside from the package fee).

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3. Low Rate Essentials, also known as a Basic Home Loan

A basic home loan is just that, a loan that is no frills and has limited features – but also very few fees. You can save money using a basic home loan if you do not need features like an offset account and discounts on other banking products.

The benefits of the Low Rate Essentials loan are no annual fees, or ongoing administration fee and you have access to your account via internet banking.

 

4. Family Pledge Home Loan, also known as a Guarantor Home Loan

This is a brilliant product for home buyers that don’t have a large deposit and have a family member that can assist with giving their equity in a property to bridge the deposit gap. The benefits include no LMI costs, no extra fees and costs with the standard guarantee and legal fees to apply.

The only drawback is that guarantors need to be your immediate family like parents, siblings or close relatives such as uncles and aunties. Gateway might be able to consider other guarantor relationships but it depends on your individual situation, with the guarantee amount not being able to be over 50% of your parent or guarantors property value.

guarantor-home-loan

Example of a typical guarantor home loan structure

 

What are Gateway Credit Union’s Interest Rates?

Gateway Credit unions interest rates are fairly competitive.

Premium Package Home Loan Rates

This is Gateway Credit Unions professional package and is only available on new home loans over $150,000, based on principal and interest repayments for owner-occupied purposes. Interest rates as at 23rd November 2018, and subject to change without any further notice.

Premium Package Home Loan Variable Rate Comparison Rate
🔥 Special Offer: Variable Rate (LVR up to 80%) 3.69% pa 4.01% pa
🔥 Special Offer: Variable Rate (LVR over 80%- 85%) 3.74% pa 4.06% pa
🔥 Special Offer: Variable Rate (>85% LVR)1 3.89% pa 4.20% pa
1 Year Fixed Rate 3.77% pa 4.88% pa
2 Year Fixed Rate 3.80% pa 4.80% pa
3 Year Fixed Rate 3.83% pa 4.74% pa
5 Year Fixed Rate 4.21% pa 4.78% pa

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Low Rate Essentials Home Loan

This is Gateway Credit Union’s Basic Home Loan, based on principal and interest payments to buy an owner-occupied home. Interest rates as at 23rd November 2018, and subject to change without any further notice.

Low Rate Essentials Home Loans Variable Rate Comparison Rate
🔥 Special Offer: Variable Rate (LVR up to 80%) 3.64% pa 3.66% pa
🔥 Special Offer: Variable Rate (LVR over 80%- 85%) 3.67% pa 3.69% pa
🔥 Special Offer: Variable Rate (>85% LVR) 4.93% pa 4.95% pa

 

Standard Fixed Rate Home Loans 

Interest rates as at 23rd November 2018, and subject to change without any further notice.

Standard Fixed Rate Home Loans Fixed Rate Comparison Rate
1 Year Fixed Rate Home Loan 3.93% pa 5.06% pa
2 Year Fixed Rate Home Loan 4.03% pa 4.98% pa
3 Year Fixed Rate Home Loan 4.13% pa 4.91% pa
5 Year Fixed Rate Home Loan 4.23% pa 4.81% pa

information-session

 

Rates advertised apply to principal and interest repayment types only. Gateway Credit Union reserves the right to vary these interest rates at any time. Comparison rates are calculated based on a loan amount of $150,000 over a 25 year term. WARNING: Comparison rates are true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in different comparison rates. Applications for finance are subject our standard credit assessment criteria. Full terms and conditions are included in the loan offer. Fees and charges apply.

 

What documents does Gateway Bank need for a home loan?

Gateway Bank’s Home loan application checklist is fairly standard compared to most banks, assuming you are a salaried employee and you are purchasing your first home they would ask for:

  • ☑️ Signed Application Form + Membership form completed by all borrowers
  • ☑️ Identification documents: Current Medicare + Drivers license, or Australian passport
  • ☑️ 3 Months Bank statements showing your salary credits with the name of your employer
  • ☑️ 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
  • ☑️ Most recent statement showing all continuing liabilities – i.e. any open credit card, personal loan, or overdraft statements.
  • ☑️ Signed Contract of Sale

gateway bank home loan checklist

Where they are a bit different from some of the bigger lenders are requiring more information if you are in casual employment, contract employment or if you receive bonuses and commission.

  • ✳ If you are in casual employment, they will need your 2 most recent payslips AND most recent year’s PAYG Payment Summary (also known as a group certificate).
  • ✳ If you are in contract employment, they need your 2 most recent payslips AND a copy of your employment contract with evidence of the remaining contract term.
  • ✳ If you receive a bonus, regular commission or over time they will need your 2 most recent payslips AND most recent year’s PAYG Payment Summary (also known as a group certificate) AND confirmation from your employer that overtime is a condition of employment.

These aren’t extremely onerous conditions compared to some lenders, so I rate them 4 out of 5 in terms of documents required. 

 

How much can I borrow from Gateway Bank?

Gateway Bank’s credit criteria are subject to change at any time, and all lending is up to credit verification and satisfactory approval but as an indication, we have run the following scenario through their borrowing calculator:

  • ✅ A single person living in Brisbane (In the 4000 postcode)
  • ✅ Earning $70,000 PAYG salary income
  • ✅ Average monthly expenses of $2,000
  • ✅ Has a credit card of $5,000 and no other debts
  • ✅ Assuming this person has a 20% deposit as genuine savings
  • Figures as at 26 November 2018, subject to credit criteria and will change without notification.

We run the figures through our serviceability calculator and got the following results:

gateway bank home loan capacity review

As you can see from the results, Gateway Bank is at the upper end of providing borrowing capacity when compared to the list of other lenders and around $53,000 higher with a borrowing capacity of up to $348,150.

These figures are indicative and would be subject to meeting credit criteria, valuation and satisfactory verification of all supporting documentation. They are accurate as at 26 November 2018 and subject to change without any further notification.

Would you like to know your borrowing capacity? Chat with our home loan experts to see what you can afford.

chat-to-mortgage-expert

 

What else does GateWay Credit Union Offer?

Gateway is a fully licensed bank, and as such has access to all the products you would expect from a savings account, day to day transaction accounts, personal and consumer loans, savings and insurance products – in addition to their home loan products.

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Like most banks Gateway can offer regular transaction accounts and discounts on other products.

 

How is customer-owned banking different to regular banking?

Member-owned credit unions operate quite differently to standard banks. As credit unions are owned by members they don’t try to get every dollar they can out of you, they are there to operate to help you – their owners, and members and usually are more customer focused than shareholder focused banks.

The disadvantage is that the major banks have much larger branch networks and systems which can sometimes give you better deals and definitely have more flexibility around tougher home loans.

information-session

 

How can you become a member of Gateway credit union?

Unlike other credit unions, like the Teachers Credit Union where you need to be a teacher to become a member Gateway Credit union allows anyone to become a member all you need to do is get identified and pay a small fee for their share subscription.

best-home-loan-brisbane

These 11 steps will help you find the best home loan in Brisbane!

Read More: How to find the best home loan

 

What are some Gateway Credit Union Customer Reviews?

As we covered above, Gateway’s own members report some of the highest customer satisfaction scores having rated them 87% compared to the major banks whose customer rate them 78.50%.

gateway bank reviews

With that being said, online the reviews for Gateway can be mixed.

 

How does Gateway compare to other banks?

Mortgage Broker Brisbane

The Hunter Galloway Mortgage Broker Brisbane team is here to help. We have a team of home loan experts.

 

Overall each Bank, and Credit Union has its own advantages and disadvantages which will come down to your personal situation.

Talk to one of our mortgage brokers calling us on 1300 088 065 or complete our free assessment to find out more details and see if Gateway is a good fit for you.