Just found this on the ubank site this morning and thought should let some people on her know.
Boxing Day Offer
Refinance your home loan
today & we'll give you $2,014.
Unlock your home loan & get $2,014 cash when you switch.
Because at UBank, the Rewards are Real.
Referrer and referee each receive $10 after referee makes 5 settled card purchases within 30 days.
That's true wisc. Always read the fine print, and take note of ALL inclusive fees. 4.62% variable is a bloody good deal though. Just refinanced with Macquarie at 4.94% only a month ago. Am happy with that due to requirements, but .32% is making me think I should have waited for the new year…
Always wait for the boxing day mortgage specials!
Is 4.94% the market standard deal now? How much roughly was the loan for and was it at under 80% LVR? Ubank will only refinance at under 80% LVR.
Maybe…my work mates and I were only speaking of this last night (yep - sucks to have worked Xmas night). Apparently Adelaide Bank offered a friend of a colleague low 4.8's.
It was, but I have option of taking another 9%, obviously paying mortgage insurance on this. Again, another deal breaker if not offering over 80% LVR.
I am actually leaving my bank and they were at 4.83%
Moving to loans.com.au which are 4.49% and as far as I can tell have been the cheapest mortgage provider for the last year. They also have some added features like an offset account which my current provider doesn't have either.
I am with them for last 2 years and paying 4.33. only downside is there are some charges when you take up the loan but with Ubank it is ZERO.
But offset account with Bpay etc make them standout. My loan is RBA rate linked for five years.Unfortunately they are not offering this product anymore.
Well its 295 dollars difference between startup costs.
Considering the difference in rates that really shouldn't make a big difference.
How did you get 4.33?
What's loans's track record of rate movement in the past compared to the big 4? They used to have a product that tracks RBA rate movement but that is no longer available. So with the new product now I don't know if they are offering a low rate now but slowly close up on competitor rates in next year or so. That's how they usually win new business at expense of existing clients. They don't publish their historical reference rate for all to assess, you only see the rates for new customers.
Fairly good, I remember when I first got my loan it was between my current provider and loans.com.au My current provider really upped the prices since I started with them which is why I am jumping and it only has been a year.
Loans.comn.au has always had one of the lowest rates.
However they have zero exit fees and have stayed competitive over the last year so I doubt that would change.
The only concern I have with loans.com.au is that it's not an authorised deposit-taking institution (ADI) so any amounts up to $250K in their 'redraw offset account' is not covered by the Australian Government Guarantee Scheme. I'm not an expert so I'm not sure what happens to the deposit if the lender goes bust (i.e. whether the borrower will lose the deposit amount and is still liable to repay the full outstanding loan amount). More information here:
But you owe them the money, not anyone else, therefore you will simply owe the receivers the outstanding amount - at least that's how I read it. It wouldn't be a nice situation to be in if they were to go bust and you owe $10 against your house worth $750K…. Can anyone with a financial background have their say on this?
There is lack of clarity from loans.com.au whether the balance in the redraw offset account is treated as a loan repayment (and hence a negative debt to the borrower) or a savings deposit (and hence an asset of the borrower). If it is the latter (deposit and debt separately distinguished) then I suspect that these two amounts will be separately treated. All I know is that the latter is the case for a product of this structure for any of the Australian banks and other ADI. Technically the loan is not considered paid off if the amount is just sitting in an offset account. The offset account structure merely facilitates a lower interest calculation.
Which bank are you leaving which you had 4.83%? Sounds attractive/competitive. I guess the demand for variable rate loan has dropped since most have gone onto fixed rate loan.
I guess the demand for variable rate loan has dropped since most have gone onto fixed rate loan.
what gives you the idea that most people would be moving to fixed?
Sorry I didn't mean to say 'most people' but rather the proportion of fixed rate borrowers relative to variable rate borrowers have gone up over the past year or two so that leaves a relatively smaller variable rate market for lenders to sell their variable rate products.
I was being quick typing on my phone while out on boxing day sale so didn't quite get the message out clearly..
Choicelend through my mortgage freedom
Wouldn't recommend them though they keep pushing their rates up which is why I am leaving. They were on par with loans.com.au and now they are .34% higher and that is after a year.
The fixed loans seem a bit bullshit to me to be honest. All the fixed I have been offered has been higher than the variables but they only lock in for 2 years. The chances that rates are going to skyrocket to the point where fixed is actually saving you money is extremely slim.
Please correct me if I am wrong, Ubank does not offer offset facility?
Well if that's the case, then will be a deal breaker for some.
what is offset facility?
Allows you to have a separate account whereby any funds which are lying within reduces your overall debt, and interest paid off on this reduced figure.
You are correct. The UHomeLoan information guide states not available.
From memory they have free redraw though
Doh beaten by 6secs
offset facility is coming in march and new and existing customers will be ported over
offset facility is coming in march and new and existing customers will be ported over
where did you see this info?
They have a redraw, which can act as an offset.
There is a difference when it comes to the taxation office. There's an interesting article describing it. I'll see if I can dig it up.
That is only in relation to investment properties though from memory?
Yep, that's the general implication.
If you live in your current home paying the mortgage with a redraw etc paying it down etc… Then say you win lotto or get a better job or start a family or want to move to a bigger place but keep the current place.
If you have redraw you wont be able to convert the PPOR to IP and claim tax deductions on the interest of the loan. You will need to sell the PPOR. As the money used from the redraw will be used for a PPOR not IP.
If you had offset you can do what you like with the money and it wont effect the ability to claim interest on the PPOR->IP.
*I am not a accountant nor a broke. See independent advice being choosing your home loan
Yes - hence I am hesitant to move to Ubank.
However, not sure if you re-finance and re-do the valuation prior to conversion from PPOR to IP - then does that start fresh?
Cheers
I think when you refinance they will only accept the loan amount/out standing loan amount? and of course they will re-value your house to see if it's worth taking on the loan or not.
Sorta like doing a balance transfer? I'm not sure on this though
This will affect people those who wants to convert their primary home to an investment property. According to ATO once you paid into the loan that is considered paid off portion. Redraws will not considered as part of the loan on property
So if I have a loan balance of $396,000 and Valuation is $539,000 (80% is $431,200) and i can only loan $396,000 and I cannot loan $431,200 even I have the ability to service the loan?
esp. if I have $175k in my offset account.
When we refinanced with ubank, we were able to obtain a loan at 80% of their property valuation if we wanted to? We didn't need it, so we just requested a lesser loan amount. …so if yours is valued at $539k, you could request a loan of $431k…they are quite modest with their valuations however… Hope that helps :-)
This is it —> http://www.catalystfinance.com.au/blog/offset-accounts-vs-re…
Access to funds is the same I believe, i.e. liquidity, but the ATO regards the end figure as tax deductible in regards to redraw, not the original loan amount as it stands with an offset. This is extra money in the pocket to an investor.
they dont, but they have unlimited free withdrwals
Takes usually 1 day to end up back in your normal account, so unless you need instant access to the money then its not much of a disadvantage to a redraw account (especially if there is a 0.3% difference in interest rate for instance)
will give it a crack, just note that its only the first 700 customers.. also may be cancelled at any time.. https://www.ubank.com.au/ubank/ib/documents/uhomeloan-specia…
Remember with Ubank their valuations are hyper conservative. They valued my property 16% less than market value. and they then expect you to have 20% deposit/Equity in the property. So all up you need close to 40% Equity. In saying that thou their rates are only the best in the market. now if they just hurry up and get an offset account.
Loans.com.au is 4.49% and have been cheaper than ubank for at least a year. I am moving over to them now although 2000 dollars certainly is tempting. Depending on your loan 2000 could take years to make up and it would certainly pay all the settlement and exit fees several times over.
I'm pretty sure they use independent valuers. Our valuation certainly came in within the ballpark.
Throw the cash back into the mortgage and your laughing. Or pay off higher interest debts.
Or invest in a nice dictionary!
'Scuse me?
The fine print on the gift card indicates that's not (directly) possible. My understanding is that you will receive a gift card that works for buying groceries and clothes, etc. Of course, if you're not spending $2014 of your own cash and using the gift card to make purchases for a few months, you can take your own money and put that on the mortgage, but it's unlikely you can just receive the gift card and make a $2014 payment on your mortgage.
I received a gift card from another company as compensation during an insurance claim following a burglary, and found I couldn't use it on a surprising number of transactions including payment of council rates, electricity, gas, phone bills even though they were offered BPay. Cards from this company may be different, but the T&Cs are not terribly different.
For loans $350k + - counts me out!
Not necessarily. You can borrow more than you need and then pay it back straight away.
Assume you need to borrow $300K to refinance your existing loan. If you have approved borrowing power to increase your loan, refinance and add $50K to the loan on the grounds you're going to "do some renovations". They'll then loan you $350K which gets you the deal. You would then end up with a $350K loan (since they pay your existing loan at your existing bank), but also another account with $50K cash in it (because they only needed to give your existing bank $300K so there's money left over). Take the extra $50K cash and dump it into the $350K loan, making it immediately a $300K loan with the benefit of the preferred interest rate.
Source: I did this during my last refinancing.
Disclaimer: It was not with UBank, and I am not a financial adviser. You should seek your own advice before conducting any transactions.
That's an excellent strategy if you're ok with redraw.
I could be totally off here, but…
It's a good work around to get the $2000 bonus, although you will still be paying the principal on 350k, which is a difference of about $75 a month that you have to find and pay off to Ubank, which you wouldn't if you got the original 300k loan (that extra $75 could be going into the offset / redraw instead).
The $2000 bonus would obviously make a difference in the 350k loan, but not sure how that compares to having 50k less principal.
On the other hand, if you truly do need extra cash for reno's or a car etc, you won't get a better rate than 4.62%.
Believe ubank still only lend up to 80%. Anything over this would get hit LMI too of course.
Here is from the last review on that home loan:
They rejected my refinance application just because I 'm planning to spend money for renovation to increase my property value! What stupid logic behind this decision?! never tell them you are going to renovate your property when you refinance. this is so they said their policy..,. Stupid. People spend money for renovation is to increase the value right? not to mention their bank valuer gave so low valuation to my property. Dislike UBank and never recommend to anyone.
Ubank wants the simplest - buy a single property and hold.
The following are considered to be too complicated and they will not lend
1. buy a single property with detached dewelling
2. buy and renovate
3. buy and build granny flat
4. buy and subdivide
5. buy, knock down and develop
6….
Disclaimer: I do not work for any competitor of Ubank
I am on a 2 year fixed with CBA. Can I still apply for this?
Yeah I'm the same, pretty green on all this but from the little research I just did on google I think the fees involved with doing so are going to be much higher than the benefit if your on <5% and early on your loan
yes - just watch your exit clause and fees…. fixed rates tend to have more lockins than VR
Check your T+C's and break loan costs. Breaking a fixed loan will most likely incur a cost.
If I have a laon with the full amount in the offset account what is the best way to take advantage of this offer? If I move to Ubank and put the money in the loan account will that trigger a payoff?
no offset at Ubank. if you have full amount under offset account, basically you dont pay any interest. so whats the point to refinance ?
offset feature is coming in march 2014… all existing bank customers will be moved over
Source for this info? Great news if true!
min $100000k balance - I was hoping there was a loophole for morgage payers that have < $50k left :)
Wow, $100mil. There's only a few people that can take up the offer. :)
min is $350k for this offer as stated above and only the first 700 applications get it.
Anyone know if there are any penalty fees/exit fees for leaving.
For a minimum loan amount of $350,000 - I'm not eligable :(
or eligible..
why u do dis?
WARNING:
If the property has any detached tenantable dwelling (converted garage, granny flat, pool shed, pool room, etc), they will reject your application.
Ubank: "we are new in homeloan business, building with detached tenantable dwelling is too complicated to us!"
tg: "But NAB has been in the market for a long time"
Ubank: "NAB is NAB, Ubank is Ubank"
"NAB is NAB, Ubank is Ubank, lol is LOL" and Ubank is backed by NAB. Oh wait what i'm talking about again …
yea and the cancellation is not before they found out, which usually after you finished with the document upload/check…. pretty wasting your time really!
I will wait for another 10 years to get $2024 ($10 extra)…
heads up:
They will ask you for endless documents to upload. Some are pretty petty (that othe banks never seem to ask for) like a letter confirming whether the deductions in your salary is voluntary and can be cancelled, letter stating whether your property is a serviced apartment, stat dec confirming your middle name etc…
different people will message you asking additional documents to upload, and maybe they do not talk to each other coz the process was just going circle around!
and you got to love the 30 mins phone call chatting about your spending habit =)
had none of this with my loan…
uploaded all docs, got a request for one additional one.. few weeks later it was all done and I was saving hundreds of $ a year…
if you have a simple mortgage (e.g. house, with well under 80% mortgaged, and want a simple refinance) then uBank is a good choice..
Maybe you are just a simple person with a simple property.
Ubank is still new in this industry, so it cannot handle complicated person with complicated property….
Maybe you are just a simple person with a simple property.
Ubank is still new in this industry, so it cannot handle complicated person with complicated property….
which is pretty much what I said…
Its a pretty simple concept that simple mortgages generally would be lower risk and therefore are what uBank are targeting with their lower interest rate
Ubank is Nab.
It's not because they are new it is because they are making sure there is zero risk. They are basically offering cheap loans for the low risk portion of the market which is why they take refinancing only (so there is an established history) and you can only borrow 80% of the property price.
80% of valuation or the amount os from other banks?
valuation and they usually low ball it.
hmm Ive got 5.47% with Homeside which is NAB and yet Ubank is 4.62% thats a big difference.
Pity I only owe 70 odd thousand so cant take up this loan.
Take out mortgage for 100k and then deposit 30K back
for this promo - min loan is $350k?
Just wondering why is it expired now?
Based on the T&C
Submitted online at ubank.com.au between 26 December 2013 and 31 January 2014;
I spoke to someone yesterday at uBank and they said you have until the end of the month. I also assumed it was only for boxing day but doesn't seem to be.
Also … does anyone can confirm if Ubank offers Interest only repayment? I can see that is available as part of the calculator but I just could not find the info on it.
yes they do, i have a loan with them and its interest only.
I dont think it is expired yet,,,stated on the website "Apply by 31 January"
Deal is still live (likely until 31st Jan 2014). I read the fine print, not as good (for me) as first thought. The $2014 is given to you on an Eftpos gift card (cannot withdraw cash, just use over counter). It is also limited to the first 700 applications and you won't know if you made it until 30 days after settlement.
Careful if you are signing up for the money to cover your 'break costs' like I was.
I am still very tempted by loans.com.au blackboard home loan. Appears to be lowest variable available.. Any thoughts?
Same here though I would prefer offset to be available now instead of later.
can we ask if we are eligible for the 2014 gift card before proceeding?
You can try, they still have the promo live as of writing this so either they have cards available or a lazy web team =)
An up front discount means net to nothing it's the interest rates… That said u bank are usually pretty good…