Home Loan Advice - On choosing between these

Ldwnguy on 24/11/2015 - 01:21

Hi everyone,
I am new to this home loan business, I have given these quotes by a broker,

Background:
First home
Property price- 590,000
20% deposit- 118,000

After discounts,

  1. Commonwealth bank
    Variable Rate – 4.3% (5.6 with 1.3 discount)
    2 Year fixed -4.09%
    3 Year fixed -4.19%
    Annual Fee 395$

  2. ME bank
    Variable Rate – 4.09% (4.88 with 0.79 discount)
    2 Year fixed -3.89%
    3 Year fixed -4.19%
    Annual Fee – None

  3. Suncorp bank
    Variable Rate – 4.3% (5.7 with 1.4 discount)
    2 Year fixed -4.19%
    3 Year fixed -4.29%
    Annual Fee 395$

I am trying to make decisions,
1. Fixing for sometime vs leaving the whole loan at the variable rate
2. If fixing, 2 years / 3 years
3. What would be your preferred bank, out of the above 3 ?

I am very naive for this whole exercise and any opinion would be much appreciated.

Thank you

Financial

Comments

  • shadowarrior on 24/11/2015 - 02:02

    You know what it will finally boil down to? Which bank properly valuates your land+build (am guessing you are building) quote.
    Our first 2 bank valuations came back lesser than the price we were paying. Third one was undervalued by $20,000 again. We just decided to pay the difference from our pocket.

    check these things to compare the banks:
    - application fees
    - account keeping fees
    - free offset account
    - lots of branches, a lot of builders will want you to bring your final cheque during handover. So you should be able to sort out the banking paper works, ask for the final cheque, and go pick it up from a branch.

    We finally went with Suncorp with 0 annual fee etc.

  • tomleonhart on 24/11/2015 - 08:18

    Broker here:

    Couple of questions:

    • Suncorp is currently waiving their annual fee for the life of the loan so check again with your broker.
    • Where is ING with their current awesome deal?
    • If you're buying a home, it's worth going with a bigger lender for the first time as they are more efficient. E.g.: CBA, SUN.
    • Fixing or Variable all come down to you. Fixing you buy certainty with flexibility, variable you buy flexibility with $.
    • CBA has a lot of ATM than Suncorp.

    These are not advices, they're just my opinion as a customer of Suncorp :-)

    • sagrules on 24/11/2015 - 12:00
      +1

      Just be aware both ING and Suncorp are increasing their fees from either Dec or Jan this year by around 0.16%. Found that out after put in all the documents to do refinance.

  • tunzafun001 on 24/11/2015 - 09:42

    My advice, don't be afraid to tell them exactly what you want. I find the Credit Unions more flexible.
    Last year I went with 4.25% fixed for 3 years With 100% offset (traditionally only offered to variable loans), no annual fee, no set up fees, conceded I would pay $250 for 2 valuations.

    Out of those 3, I know a couple of people who are with ME and have been happy enough.

  • CyberMurning on 24/11/2015 - 10:19

    also, offset accounts vs not?
    why not BOQ, 3.99% variable. no offset though

  • vssv on 24/11/2015 - 10:38

    Hi, I am in process of fixing with BOQ for 3 year @3.94%

  • vssv on 24/11/2015 - 10:40

    But horrible experience, it's almost 2 months , asking for a new document every week and assessor works in Perth and time difference makes more complicated as well…!

    • tomleonhart on 24/11/2015 - 10:50
      +1

      did you go to a broker?

      So at least he/she deals with the time differences and you only need to send document :P

      • vssv on 24/11/2015 - 22:52

        Yes, it's through a broker. 2 months is too long….!!!!

  • Islund on 24/11/2015 - 11:03

    How about Mortage Ezy - they look the goods on paper.

    https://www.loanmarket.com.au/compare-rates/compare-home-loa…

    • userblocked on 19/08/2016 - 13:10

      Have you process with this?

  • superbird on 24/11/2015 - 16:06

    You shouldn't just look at rates alone if you're looking to build a property portfolio.

    For example, can you get interest only on those options? Which bank would allow to access equity easier?

    I would be more inclined to go to CBA if I was looking to build a property portfolio.

  • poboy on 24/11/2015 - 20:12

    You can also ask to have the annual fee waived. Then every 12 months, call up and ask for it to be waived again. It works because they want to retain you.

  • naritas on 25/11/2015 - 09:22

    Perhaps check out this offer: https://www.naritas.com.au/latest-news/3-69p-a-cr-na-mortgag… - 3.69%p.a. (CR n/a) fixed for 2 years which can be combined with a 3.99%p.a. (CR 4.35%p.a.) variable. Due to your loan size you could probably wrangle a rebate.
    Also check out: https://www.naritas.com.au/latest-news/final-weeks-for-our-b…
    In short, there are plenty of offers that offer superior pricing to what your broker has mentioned. As others have mentioned, price should not be your exclusive measure of performance, but it still matters. So, for example, if you were interested in Suncorp, check out that second link, you'd see that you'd qualify for an extra $1000 on top of the Suncorp $1500 rebate.
    Lastly, if you were looking for an idea of what's sharp and popular right now with mortgage products, check out: https://www.naritas.com.au/widgets/rates-widget/?t=hl (simply click on the various tabs to see pricing for 2 & 3 year fixed products and variables).
    Hope this helps.

  • dwnguy on 01/12/2015 - 10:28

    Thanks a lot guys, very helpful info. Much appreciated.

    • denis7 on 03/12/2015 - 00:30

      if you are interested to use Naritas as your broker, I can be your referrer for the $250 each for both of us. I just refinanced my homeloan using Naritas. I am very pleased with the professional services provided. Send me a PM if you are interested.

  • aussie bargain on 03/12/2015 - 15:22
    +1

    I would choose MEBank out of those (based on your list).

    Mainly because there is no annual fee. Remember that those annual fees will add up and add to your costs.
    Things that you can also consider are:
    - CBA discount - check if that is for the life of the loan or only for 3 years etc. From memory, most discounts from the big 4 are only fixed for the first 3 years etc, which renders any discount useless

    • Other alternatives that I have looked at are:

    • ING (SVR currently at 3.99%, but remember that in January their rates will go up to 4.17%) - the trouble is when you go part fixed with them, you don't fix the discount on the whole loan. Say if you go with their current promo: 3.99% (0.85% discount off SVR), then you only keep the 0.85% discount off the SVR. If you combine the loan with part fixed say for 3 years, interest is 4.13% (0.1% off their fixed rates). After 3 years, you would then only keep the 0.1% discount for the fixed part - which effectively means that they are "locking" you to a fixed term. If you do decide to go with ING, I would recommend to go 100% variable with their Orange product.

    • Suncorp - I am surprised that there is an annual fee - when I looked at this last time, they waive the annual fee for the life of the loan (http://www.suncorpbank.com.au/home-loans/options/home-packag…)

    • BOQ - they currently have a promo which is quite good, with Variable Rates at 3.99% and fixed at 3.94% - some fees apply. remember that they have raised their rates so it's unlikely for them to raise again (e.g. when compared with ING)

    • Going through Brokers - just get the ones that give you the best bang for your buck. I have seen many posts from Naritas, but I haven't looked at them in details. Just remember that it may be worthed to go through brokers that will give you cashback for the life of the loan like matesrates (and some others). This will end up saving you money.

    I am currently finalising my loans with HSBC and I decided to go with them because:
    - flexibility to combine with fixed loans (but keep discount on SVR)
    - I have my monthly fees ($35) waived due to work
    They aren't the cheapest, but is suitable for my situation (Variable at 4.05% and 3 year fixed at 4.15%) - they haven't raised rates, but likely to (as did ING, BOQ, Suncorp and all the big 4)

    ING came in a very close second (3.99% - raising to 4.17% in January) with their Orange home loans due to:
    - Cashback - 1% from loan repayment
    - Broker Rebate
    - Very low annual fees ($199) - which effectively will get covered by the cashback - first year free

    Being a first home owner myself, I can understand that the process is quite overwhelming and it is a big decision, so think it through and best of luck.
    :)

  • samprofs on 05/12/2015 - 14:45

    I would choose ME Bank.

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