Seems like a good deal.
It has Offset as well as redraw.
ME Bank - Fixed Rate 3.99%p.a. Flexible Home Loan for Owner Occupiers for 2 Years (CR 4.89%)
60
nightfever on 03/02/2016 - 11:24 mebank.com.au (285 clicks)
Last edited 03/02/2016 - 13:22 by 1 other user
Last edited 03/02/2016 - 13:22 by 1 other user
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@naritas, off topic, but do you have any info around which lenders have increased their rates outside the reserve bank already in the past 6 months and which ones didn't? Did Newcastle Permanent?
Also can you visit you office in Mosman or are you online only?
Hi Block,
Excellent questions.
do you have any info around which lenders have increased their rates outside the reserve bank already in the past 6 months and which ones didn't?
Our experience has been that since the changes were led by APRA to curb investment lending by the pillar banks that the credit unions and building societies have become more cost competitive in the past 6 months. In particular, we noticed the traditionally conservative lenders who didn't lend large volumes to investors have really jumped to the top of the pack, examples include Newcastle Permanent (NPBS), Hunter United and Family First CU. That said, NPBS has traditionally had a reputation for being a cost-competitive lender for good borrowers.
The general industry opinion is that the conservative ADIs who are funded largely by their own deposits are likely to be the price leaders over the coming 24 months. We don't publish extensive data tracking price movements mainly due to the fact that we have over 60 lenders and thousands of loan products, so the version control and update of that data matrix is not cost effective. We do publish a list of our most popular products that is frequently updated and the clear trend has been that the smaller lenders have now risen in popularity.
Did Newcastle Permanent?
NPBS for most of our borrowers actually decreased owner occupier pricing and introduced some very popular refinance incentives. They did increase their investment lending pricing, however, they are one of the few lenders that will provide owner occupier pricing to investment borrowers if the borrower has the majority of their loan collateral related to their PPOR.
With respect to specific articles we've published on price and policy changes by the lenders on our panel, we've published the following articles:
1: APRA led investment lending change summary
2: Explanation of the changes and how it affected various lenders
3: What is investor mortgage lending - Useful for people with multiple properties and loansAlso can you visit you office in Mosman or are you online only?
You can definitely visit us. We also have extensive online facilities, so if your preference is to do things mainly online or remotely - we can cater to that as well.
Hope this helps.
Thanks
+1 for Mod to take action, @naritas the way you promote it clearly hijack the OP and will get negative reaction on others. If you think that you have better product, just make your own topic and discuss it there. But you need to be clear about your fees upfront. Someone on ozbargain was charged for fee when he didn't want to go ahead with your broker.
@naritas: Since you have PM me and threaten me to remove my post, I have found the comment from that ozbargainer here that was charged fee from you guys.
https://www.ozbargain.com.au/node/217941#comment-3181006And according to your reply, you will charge for your time if someone decided not to go ahead. If that is the case do you stated this UPFRONT clearly? not in the small fine print. This is ozbargain forums and if there is ever any catches, it should be stated clearly.
Thank you for your feedback Samehada.
To reiterate what was sent you to privately, the statement that you are making about someone being charged is false. So to is the imputation that any post we have made is deceptive.
according to your reply, you will charge for your time if someone decided not to go ahead.
For the sake of clarity our actual reply is pasted below:
"Strictly speaking we do not charge such fees in all instances. In fact such charges are extremely rare. As such, including such a statement in an advertisement would be just as likely to mislead as it would be to assist someone. We do, however, have this information on our website and provide it at the moment someone enquires.We have such provisions in place primarily to allow us to focus on legitimate applicants and to discourage financial fraud. In other words, if the person is unsuccessful because they have lied about their figures, which most commonly occurs when a person may intentionally try to mislead Naritas and the lender by saying that they have clean credit, an approval is prepared and then a credit check is done and it is uncovered they have credit blemishes or multiple arrears - they may be charged by us. Such instances are extremely rare, but nonetheless are persistent and hence why the provisions exist.
In terms of being charged if advised not to proceed, again this is a rare set of circumstances and not particularly relevant to this offer. The hallmarks of a person who would fall into that category would be a person who has come to us specifically seeking advice on whether a lending scenario is feasible and asking to have a variety of serviceability assessments performed and scenarios modelled for viability. In other words, they are coming to us specifically not wanting to be obligated to take a loan or to feel pressured into a finance contract. They simply want our advice. As such, we may advise them not to proceed and charge them for our time.
I hope this helps clarify your understanding of this offer and our services."
I spoke with Naritas and can say what they're saying is true and also commonsense. They were really upfront about the fact that a chat is free but a valuation or approval they deliver may be charged for if I didn't proceed after getting approved. Most brokers and lenders I spoke with had the same kind of policies.
@naritas: NPBS is a non-bank lender and usually will have stricter lending criteria, any circumstances that someone can't borrow what they need? Do you also charge fee for that?
@samehada: Thank you for your questions.
NPBS is a non-bank lender and usually will have stricter lending criteria, any circumstances that someone can't borrow what they need?
It is true that NPBS has stricter lending criteria than the average bank. This, however, is what allows them to consistently price their products at a sharper price point than the average bank and ultimately benefits borrowers with healthy financial profiles. It's actually worth noting that any lender with easy credit criteria cannot maintain a leading price position in the long term. This is due to the economics of money lending vis a vis delivery rates (the rate the consumer pays) are directly influenced by: the cost of funds, competition, service quality and defaults/arrears. The cost of funds & competitive factors are not that easy for a lender to control as they are largely determined by the market. Defaults and arrears, however, are a direct product of their policy. Poorly trained staff, unreliable or insecure systems, financial risks to do with deposit funds & complaints statistics are also factors that people would typically evaluate. Such qualitative factors are a reason why incongruently cheap variable rate pricing is viewed skeptically for its long term viability in light of the cost of delivering on such factors.
Do you also charge fee for that?
With respect to fees, it is worth noting that the overwhelming majority of our clients do not experience any out of pocket expense for utilising our services. In fact, the vast majority of our clients enjoy rebates and cost savings that are not on offer directly from the lenders we are accredited with. We also have entirely transparent processes that, by and large, follow industry norms. In short, say for example a Naritas employee provided incorrect advice about a person's ability to qualify for a loan with a stringent lender such as NPBS there would be no charge from Naritas (assuming the applicant fully and accurately disclosed their financial circumstances, as mentioned earlier). Furthermore, our entirely blemish free record at the Credit & Investments Ombudsman after nearly 15 years of business & our volumes of repeat customers and referrals are testament to the fact that our staff are skilled & ethical professionals who manage this process and their clients' needs brilliantly.
Hope this helps.
Do you charge fees or not.
Thank you for the opportunity to expand upon our earlier answers. We may charge 'claw back' fees if we encounter one. This is where a lender takes back any commission paid to Naritas because a borrower is proved to be fraudulent or refinances within 18 months of loan settlement. This is fairly standard industry practice & our clients appreciate the large upfront rebates, added service and benefits we can provide by having such measures in place.
With respect to people getting charged in other situations, we operate a user pays policy. In practice, this means if you settle a loan using Naritas you probably won't experience any out of pocket expenses because we are remunerated by a lender. If you request to be provided a loan approval, advice, valuations or any other service where you didn't pay upfront for the service provision (and you don't settle a loan using Naritas after we deliver these services) you may be billed.
If you had a particular scenario that you were wanting to evaluate potential costs and rates for please make an enquiry using this form. There is no cost or obligation to have a scenario evaluated and once we have further detail on your needs we can comment with certainty.
Hope this helps.
Why are mortgages so complicated?
to make the banks can rip off us easily
It's like the TAX system… to benefit the rich.
well they have to justify their ceo bonuses :P
but for us that arent to savvy, what does the comparison rate have to do with the product? its still 3.99% for 2 years then switch to a new bank right?
It'll cost you a packet to switch. They have mechanisms to ward you off from doing that. I am in the market for a property but in SA you get scr3wed with costs coming out your ears. The system is setup to:
- Make the Rich Richer
- Keep the poor where they are
- Incentivize you to not want to earn more $
- Take
- Take more
Don't get me wrong, I love this country I call home. It's just the pollys need to stop being Nanny to everyone
Heard recently about GST >> We will increase the rate but but provide support for low income earners — so high income earners get scr3wed again?
//end rant
@jabroni Publishing a comparison rate is a legal requirement under the NCCP Act. In terms of its practical relevance, it is not a very good indicator of a product's true rate as it is typically based upon a scenario of $150,000 loan size with a 25 year term. This means that it dramatically overstates the relative importance of annual fees for the majority of borrowers in capital cities (who are borrowing closer to triple that loan size on average). Also, the standard loan term these days is more likely to be 30 years for a borrower under age 55.
A better way to model a product for your needs is to use:
- An annualised average percentage rate based upon the likely period of loan retention (typically 2 to 5 years for a standard borrower).
- A total costs approach including things like state charges, legals, and external costs (things that comparison rate do not include). Combine this with your likely usage pattern vis a vis if you know you'll not want to take the standard variable at the end of the fixed term, create an excel spreadsheet to model the correct revert rate on present rates.
Lastly, it is extremely important to remember that long term comparisons of variable rate products (typically used as a lender marketing tactic) are nearly irrelevant. This is because variable products inherently allow the lenders to change pricing out of step with the RBA. If you read complaints on this forum it is one of the most popular gripes. People often call it 'bait and switch', but the tactic is easily managed by not building a pricing model for your refinance that relies upon the lender you're evaluating maintaining their market leading variable loan price for years to come.
Hope this helps.
Comparision rate may not always correctly reflect the best rate but this has the advantage of making the lenders to stop offering low rate and slug customers with fees.
It is a common misconception that comparison rates stop lenders from doing this. This is because comparison rates don't include many important costs such as redraw fees or early repayment fees & switching costs (which is very important for offers like this one that default to a higher rate after two years). These costs are typically material in the analysis of a deal structure for the majority of home loan borrowers. For people who are borrowing over 80%LVR they don't include the cost of LMI which often makes as big a difference to the total cost of borrowing as the interest rate does.
Comparisons rates also don't allow for costs savings such as fee waivers, the compounding effect of repaying more frequently and do not include costs 'that are not presently known' which can mean that the cost of legals and valuations are not always accurately reflected because they vary on a case by case basis.
As an alternative, and speaking from the experience of having staff who have lectured in state accredited financial literacy programs, AAPR and total cost calculations are far more valuable to the majority of borrowers when determining the value of a finance deal to their individual circumstances. They can also be relatively straightforward to calculate by asking a handful of questions in combination with a spreadsheet.
Has anyone here ever tried going to one of the larger banks, not necessarily one of the big 4, and bargaining to match a deal like this one?
I have accounts with a few banks, and after I got my home loan, when the other bank managers found out, they all said "you should have come to us, we would have matched that loan". I want to know how true that is, as my fixed-term period is nearly up.
ME customer service is awful, I never received the $50 sign up bonus so I emailed the social@me…. account. They replied and said I needed to call. I called and the rep just tapped away on the keyboard whilst repeating "umm umm". After 30 mins of that I suggested he chat to a supervisor and get back to me. I never heard back. So I sent an email via Online banking and received a reply "Please wait up to 10 working days for a response but it could be longer if we are busy". I sent another message requesting them to just close the account.
Hi All
Worth checking out Bank of Queensland (BOQ) offer for the Clear Path Home Loan. Curenntly at 3.99% with a 4.12% compariosn rate if you borrow a reasonable amount of money. Offers 100% offset and the option of interest only for 5 years as well. You have to fill in a form and book a meeting with the lending manager (which can be a bit painful)but worthwhile if you are looking at a variable option. They can also fix but you lose your offset. I'm not affiliated, just the cheapest flexible home loan I could find which I have actually applied for
The BoQ offer is not too bad. There are a few features to note on that offer:
1. That pricing is for $500K+ loans. The pricing jumps up 15 basis points for smaller loan sizes.
2. There is no refinance rebate. Other lenders are offering the same or better pricing and a refinance or settlement rebate. Some of these rebates might actually be large enough for people to have money left over once they pay switching costs.
3. BoQ is not traditionally a major price competitor in the mortgage space and that's not how they usually position themselves in the market if you look back over the past decade. Credit where it's due, however, they do loans for high income earning degree qualified professionals quite well (Doctors, Solicitors & CAs for example) as well as doing business lending and leases well.Hope this helps.
Hi Naritas
Are you aware of any provider offering a better rate than BOQ with the features it offers (offset and 5 year interest free option)? Agree with your point, we are looking at a plus 500k lend but are not concerned about who provider is. Just want decent rate/features and some reasonably quick service. We are both qualified professionals also.
Hi Chetnik, great questions.
It's worth noting upfront that we can only speak generally on this topic within this forum i.e. Australian credit advice laws and site terms prohibit credit advice in this context so we can't provide any recommendations based upon your needs.
So with that being said, and speaking generally about $500K+ loans for professionals, we've placed degree qualified professionals making ~$100K+ and borrowing $500K-$1.5mil into loans cheaper than the rate being advertised with the Clearpath product. As such, we know firsthand it is possible to do better. However, to reiterate our earlier post, that's definitely not to say their offer is bad from the perspective of its present price, it's certainly not. Also, as many people might agree - the quality of a loan offer is not all about price. From that value for money perspective their relative price for service delivery is also pretty good for professionals.
If you're wondering whether you can get better pricing, it will depend on the following characteristics:
1. LVR - Generally the lower the LVR the better. It must be below 80%LVR and ideally below 70% to qualify for pricing that would beat that offer.
2. The loan size - the $750K-$1.5mil range is particularly price competitive at present. In excess of $1.5mil, contrary to most people's preconceived notions, is not as competitive unless the applicant has an absolutely sterling financial profile.
3. Whether you want fixed or variable - There are fixed rate offers superior to some of the BoQ fixed pricing. That being said,their fixed rate pricing is fairly sharp in comparison to comparable brands.
4. How highly you value features such as an offset account & bundled premium credit cards - It's our personal opinion at Naritas that a lot of consumers have been oversold on functionality such as offset accounts, lines of credit and premium cards. Those features typically add noticable cost to a loan and even the moneysmart.gov.au website has cautioned people to do their analysis and find solid financial justification for those features before committing to them. This is mainly from the perspective of a trend developing of people getting poor value for money on that additional spend on rates and fees. If you're looking for bundled offsets at cheap prices look at the non-major ADIs. They have been pricing really well recently in that segment.
5. The ability to pay interest only as a minimum repayment - Interest only (i.e. interest based repayments) have been really popular in years past from a cash flow management perspective. That said, APRA has encouraged the major lenders to incentivise P&I repayment structures due to the risks that having only an interest based payment can bring. As such, you will heavily limit your options if want IO repayments at cheap pricing for an owner occupier loan these days. There are numerous lenders that will price at sub-4% but most will be reticent to approve a borrower for IO repayments without a detailed examination of the borrower's credit and a strong rationale to do so.Hope this helps.
They seem to have the same rate for investment loans too, which is a surprise. Don't banks usually charge a slightly higher rate for investment loans?
They seem to have the same rate for investment loans too
For new business and on some fixed rate investment products. Not as a general rule.
Don't banks usually charge a slightly higher rate for investment loans?
The average bank when pricing an offer on an exclusively investment loan application is commonly charging a higher rate than they would for an owner occupied loan application. So the BoQ policy is better than most banks in that respect. That said, there are a number of lenders who aren't charging rate premiums for investment. For anyone who is interested in achieving sharp investment lending pricing they'd probably be interested to learn that a number of lenders are offering owner occupied pricing if the total debt portfolio resides with them. It's not widely publicised but people can commonly avoid getting slugged with investment loan rate premiums by moving all their loans to the same lender. As an interesting side note, some lenders will also offer incentivised investment loan pricing if you elect to pay P&I instead of IO even without you having owner occupied loans with them.
Hope this helps.
If you think this is a good deal I seriously suggest you getting financial advice!
Do you offer great financial advice? :)
Constantly but nobody ever listens!!!!!
Hahaha, I don't know. I just got my mortgages few months ago. Thought I'd share this deal coz it seems good. :\ (I saw it when I was browsing The Age site…)
Again, I didn't look into it in depth, mortgages are too complicated! :(
Comparison rate is abit high for my likings… getting 4.42 with anz at the moment and I'm not happy with their services.
Try ING Direct? I am with ING, they seem pretty good so far!
They don't have promotion at the moment and they have just increased their mortgage rate so it is best to shop around. Better to combine with cashback offer both from the lenders and from the broker.
Is it just me or most brokers all love recommending westpac? ING must only give them a very small cut of the pie.
A couple of points to note:
1. Strictly speaking this product does not include a 100% offset account. It can be combined with a variable loan that has one at 4.09%p.a. (CR 4.49%p.a.) with a $395 annual fee.
2. There are cheaper 2 year fixed products available than this one. [Mod Edited] There are also cheaper variable products available, examples [Mod Edited] & also on Ozbargain.
3. The comparison rate for this product is very high (4.89%p.a.) because it defaults to a 5.08%p.a. variable. If you want to have a discount applied to the variable at the end of the fixed period, a $395 annual fee applies.
Hope this helps.
NB: Naritas is an accredited broker for ME Bank products.
Mod Note: Removed links - Representatives are free to participate in threads as long as they don't promote or link to products that they are selling.