State Custodians, once a popular online mortgage manager, is now owned by Resimac Group Limited, a leading ASX-listed non-bank lender. While they no longer accept new loan applications, they continue to support existing customers with award-winning products and digital tools. In this review, we’ll look at their history, features, and what you need to know if you’re still with State Custodians.
This is simply a review of State Custodians: they are not available on our lending panel.
Quick Summary
- Online lender backed by RESIMAC, no longer accepting new applications
- Offers four main products: Low-Rate Home Loan, Fixed Rate Home Loan, Line of Credit Home Loan, and Green Loan
- Strengths: Low interest rates, good customer service, straightforward products, specialisation in low doc and bad credit loans
- Weaknesses: No face-to-face contact, complicated loan contracts, basic internet banking, limited functionality for self-employed applicants
- Mortgage manager model differs from traditional banks in terms of deposit protection and account functionality
History And Ownership Of State Custodians
State Custodians started in 2007 as an online mortgage manager. They built a reputation for offering low-cost home loans.
In 2014, Resimac Group Limited acquired State Custodians. Resimac is a leading non-bank lender listed on the ASX. This gave State Custodians strong funding and credibility in the mortgage market.
Unlike banks, mortgage managers like State Custodians do not hold deposits. Instead, they source loan funds from wholesale lenders such as Pepper, Advantedge and Resimac. This allows them to stay flexible with credit policies.
Over the years, they have also won awards. Money magazine named them Non-Bank Lender of the Year for five consecutive years. These awards highlighted their focus on competitive rates and customer service.
For borrowers, this history matters. It shows that State Custodians is backed by an established parent company and has proven stability.
Table of Contents
The Top 5 Things State Custodians Are Good At
- Very low-interest rates for customers and cheap loan set-up costs: Their Low Rate Home Loan, which includes an offset account, has a very competitive interest rate and no annual fees, which can save you money over the long term.
- Mostly good customer service: While there are mixed reviews from State Custodians’ customers, over half had a positive customer service experience.
- Straightforward Home Loan Products: With only four home loan products, including a Variable Rate, Fixed Rate, Line of Credit and Green Home Loan, State Custodians have fairly straightforward home loan products.
- Specialisation in low doc and bad credit home loans: Being a Mortgage Manager, State Custodians have access to home loan funding from multiple sources, including Pepper, Advantedge and RESIMAC, so they can be more flexible for people with bad credit and low doc loans.
- A fairly responsive online support team: State Custodians in an Online Mortgage Lender, so you can access their customer service team via phone or email during office hours. It has also recently launched Loan Access, an online Loan Management platform. Since State Custodians are fully online, they cannot visit you at your home or meet face to face, which is both positive and negative, depending on your situation.
Top 5 Things State Custodians Aren’t So Good At
- Do-it-yourself online lender means you are dealing with a call centre and no face-to-face contacts. Some reviews reported extended delays waiting on hold to speak with State Custodians’ Customer service team, which is run through a Call Centre.
- Very complicated loan contracts. Sometimes State Custodians’ loan contracts can get up to 90+ pages! Several customer reviews of State Custodians report complicated loan contracts and the fact that their solicitors send the documents by email, and they need to be printed by you, the customer (rather than being posted by the bank), and there is no clear mark where to sign. This can confuse First Home Owners and others with limited experience signing mortgage contracts.
- Very basic internet banking with limited functionality. Being a non-bank, State Custodians cannot offer a fully functioning offset account. Any withdrawals from redraw can only be done to one specific external bank account and may cause difficulty if you require funds fast or on the same day. In other words, you are limited and cannot transfer to any bank account you want. You can only transfer to your bank account, which you nominate when signing up. With over 4 different home loan funders (RESIMAC, Advantedge, Challenger and Pepper), there are multiple internet banking portals which can be confusing at first.
- Can make it difficult for some self-employed applicants asking more information. While State Custodians have specialised in low-doc lending in the past, they have been known to make it difficult for Self Employed applicants by asking for 2 years’ tax returns (compared to some banks that only require 1-year tax returns).
- Their funder Resimac is a non-bank lender known for being conservative. It can request lots and lots of information compared to most regular banks. Resimac and other non-bank lenders cater to a specific market segment, mostly set-and-forget home loan products. If you require a fully functional offset account or have a unique situation where you might be paid bonuses or overtime, State Custodians might not be the right choice for you.
Loan Features At A Glance
State Custodians home loans come with a mix of benefits and limitations. Here’s a quick snapshot of key features:
- Loan to Value Ratio (LVR): You can borrow up to 95% including Lenders Mortgage Insurance (LMI).
- LMI Providers: They usually work with Genworth, QBE and Resimac.
- Loan Splits: You can split your loan into up to six parts.
- Redraw and Offset: Redraw is available, and offset accounts exist but with limited functionality compared to banks.
- Fees: Their products come with no ongoing annual fees, saving money long term.
- Repayment Flexibility: Interest-only terms are available. You can get up to 10 years for investment loans and 5 years for owner-occupied loans.
These features make State Custodians attractive for cost-conscious borrowers. However, their offset and internet banking features remain more basic than those offered by the big banks.
What Are The Different Home Loan Products They Offer?
State Custodians have four main products, which they offer investment and owner-occupied loan options on.
1. Low-Rate Home Loan
The Low-Rate Home Loan is State Custodian’s flagship product. Advertised as having ‘no ongoing fees and a competitive interest rate’, it is available for both investors and those looking to buy their own homes.
This loan is similar to most banks’ basic product, with the advantage of an offset account which can give you access to BPay, a Debit MasterCard and some EFTPOS functionality.
On the Low Rate Home Loan, State Custodians allow up to 10 Years interest-only repayments with a maximum LVR of 80% and only up to 5 years interest-only for owner-occupied loans. They also allow up to 6 loan splits and cannot do land and construction loans.
2. Fixed Rate Home Loan
State Custodians Fixed Rate Home Loan can help protect you against rising interest rates and provides a fixed rate term of between 1 to 5 years, where you can lock in your interest rate repayments.
3. Line of Credit Home Loan
The Line of Credit product is suited for investors who want an interest-only facility. It does not have a 100% offset account, and fixed rates are not available.
While State Custodians’ Line of Credit Home Loan is good for accessing equity from your home, you can only get up to 5 years interest only terms for owner-occupied purposes and 10 years interest only for investment purposes. This is significantly less than some of the major banks that offer evergreen lines of credit products for up to 30 years.
4. Green Loan
State Custodians offers a Green Home Loan to existing customers. This is a very low-rate home loan for customers who want to reduce their environmental impact by making energy-efficient improvements on their properties, e.g. installing solar panels and energy-saving household appliances.
What Documents Do State Custodians Need For A Home Loan?
The application checklist required by State Custodians 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 licence or Australian passport
- 3 Months’ Bank statements showing your salary credits with the name of your employer
- 2 Most Recent Computer-Generated Payslips
- Last year’s payment summary (or group certificate)
- 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
How Do You Apply With State Custodians?
As mentioned above, State Custodians are no longer accepting new loan applications but are now focusing on existing customers.
If you are a customer of State Custodians and are looking to refinance your loan to another lender, you can log in to their Loan Access portal or speak with a mortgage broker.
What Else Does State Custodians Offer?
State Custodians do not offer much in terms of banking. Being a Mortgage Manager, it is not like Bank of Queensland or Credit unions like Gateway Bank. State Custodians cannot provide fully functional transaction accounts, a rich internet banking portal, savings accounts and insurance.
However, access to their Member Advantage Benefits Program, which gives you access to discounts at brands like Coles, Woolworths, Caltex and BWS, similar to the benefits most Credit Card providers give with the major banks, like discounts on gift cards.
Digital Tools And Customer Support
As a fully online lender, State Custodians relies heavily on digital platforms and call-based support.
Their LoanAccess platform is the main tool for managing loans. It includes:
- Pay Anyone transfers to nominated accounts
- BPAY for bills
- Scheduled payments and direct debits
- Secure e-statements
- Basic mobile app access
How Is A Mortgage Manager Different From Regular Banking?
Mortgage Managers are very different from banks. In Australia, banks need to be registered deposit-taking institutions with APRA, who are secured by the Australian government’s deposit guarantee.
The Australian Government guarantees deposits of up to $250,000 in Australian Deposit-taking institutions (ADIs) like banks, building societies and credit unions which means you are protected if anything happens to that ADI.
On the other hand, Mortgage Managers are not protected by the ADI guarantee, so if you have funds in your offset account, you do not have the guarantee and could be at risk, as was the case with Banksia Securities Limited, where customers lost up to $400,000.
Also, Online Home Loan Lenders like State Custodians do not generally have a physical shopfront, so you need to work with them over the phone and via email. The upside is the interest rates can be cheaper, but the downside is if something goes wrong, you can only deal with a call centre or work through their internet banking portals which can have limited functionality.
Several State Custodian customers have voiced one specific issue: you cannot make transfers from their Offset Account to any external account you would like – as is the case with many banks’ offset accounts.
With a State Custodians Offset Account, you can only make external transfers to one specific account you nominate at the settlement, which can be frustrating if you need to transfer funds quickly. Still, it does have access to BPay, which can be used for bills.
What Are Some State Custodian’s Customer Reviews?
Their customer reviews are fairly mixed. Some people are very happy, and others not so much, with some fairly negative comments on popular forums.
Interest Rates and Fees
While specific interest rates are subject to change, State Custodians has historically offered competitive rates, particularly on their Low Rate Home Loan product. As with any lender, it’s essential to consider both the headline rate and any associated fees when comparing home loan options.
For current State Custodians customers, it’s worthwhile regularly reviewing your rate and comparing it with other lenders in the market. If you find more competitive offers elsewhere, you may want to consider refinancing.
How Do State Custodians Compare To Other Lenders?
When comparing State Custodians to other lenders, consider the following factors:
- Interest rates: State Custodians often offers competitive rates, but always compare with current market offerings.
- Customer service: While online-only, State Custodians generally receives positive feedback for customer service.
- Product range: State Custodians offers a limited but straightforward range of products, which may or may not suit your needs.
- Flexibility: They specialise in low doc and bad credit loans, which may be beneficial for some borrowers.
- Online experience: Their internet banking is basic compared to major banks, which may be a drawback for some customers.
State Custodians FAQs
Who owns State Custodians?
State Custodians is owned by Resimac Group Limited, a leading non-bank lender listed on the ASX. This backing gives customers extra confidence in the lender’s long-term stability.
Can I apply for a new home loan with State Custodians?
No. State Custodians no longer accepts new applications. They only focus on existing customers. If you want a similar product, a mortgage broker can help you compare other lenders.
Has State Custodians won any awards?
Yes. State Custodians has been recognised multiple times. Money magazine named them Non-Bank Lender of the Year for five years in a row. This highlights their focus on competitive home loans.
What is State Custodians?
State Custodians is a Mortgage Manager and Online Lender backed by RESIMAC. They specialize in home loans and are known for offering competitive interest rates.
Are State Custodians still accepting new home loan applications?
No, State Custodians are no longer accepting new home loan applications. They are currently focusing on servicing their existing customers.
What types of home loans does State Custodians offer?
State Custodians offers four main home loan products: Low-Rate Home Loan, Fixed Rate Home Loan, Line of Credit Home Loan, and Green Loan.
Does State Custodians offer offset accounts?
Yes, State Custodians offers offset accounts with their Low-Rate Home Loan product. However, the functionality may be limited compared to traditional bank offset accounts.
Can I meet with a State Custodians representative in person?
No, State Custodians is an online lender and does not offer face-to-face meetings. All interactions are conducted online or over the phone.
What are the advantages of choosing State Custodians for a home loan?
Advantages include competitive interest rates, low set-up costs, and specialisation in low doc and bad credit home loans.
Are there any disadvantages to using State Custodians?
Potential disadvantages include complex loan contracts, limited internet banking functionality, and the inability to meet face-to-face with representatives.
How does State Custodians compare to traditional banks?
As a non-bank lender, State Custodians can often offer lower interest rates but may have more limited banking features and less flexibility in some areas.
Is State Custodians covered by the Australian Government’s deposit guarantee?
No, as a Mortgage Manager, State Custodians is not covered by the Australian Government’s deposit guarantee that protects deposits in ADIs up to $250,000.
Can I make transfers from my State Custodians offset account to any external account?
No, you can only make external transfers to one specific account that you nominate at settlement. This can be limiting if you need to transfer funds quickly.
Does State Custodians offer construction loans?
No, State Custodians does not offer land and construction loans.
What is the maximum Loan to Value Ratio (LVR) for State Custodians loans?
The maximum LVR for State Custodians loans is generally 80%.
Can I get an interest-only loan from State Custodians?
Yes, State Custodians offers interest-only options on their loans. For investment purposes, you can get up to 10 years interest-only, while for owner-occupied loans, it’s up to 5 years.
Does State Custodians offer any additional benefits to customers?
Yes, State Custodians offers access to their Member Advantage Benefits Program, which provides discounts at various retailers.
How does State Custodians handle customer service?
State Custodians handles customer service through a call centre and online support. Some customers report positive experiences, while others have experienced long wait times.
Can self-employed individuals easily obtain a loan from State Custodians?
While State Custodians specialises in low-doc lending, they may require more documentation from self-employed applicants compared to some banks, potentially making the process more challenging.
Does State Custodians offer fully functional transaction accounts?
No, as a Mortgage Manager, State Custodians does not offer fully functional transaction accounts like traditional banks do.
How many loan splits does State Custodians allow?
State Custodians allows up to 6 loan splits on their Low Rate Home Loan product.
Is State Custodians suitable for first-home buyers?
While State Custodians can be suitable for first-home buyers due to their competitive rates, the complex loan contracts and online-only nature may be challenging for those new to the home buying process.
Can I refinance my existing State Custodians loan?
Yes, existing State Custodians customers can refinance their loans through the Loan Access portal or by speaking with a mortgage broker.
Next Steps And Getting Your Home Loan
Wondering if State Custodians is right for you? Our team of Mortgage Experts can help.
Chat with one of our Expert Mortgage Brokers by calling on 1300 088 065 or filling out the free assessment form.
Unlike other mortgage brokers who are just one person operations, we have an entire team of experts dedicated to help make your home loan journey as simple as possible.
Start again
