Home loan - UBank or HSBC?

BestofOZB on 25/02/2016 - 21:34
Last edited 25/02/2016 - 23:37 by 1 other user

OK, I made up my mind and I am breaking off my fixed rate home loan.

Owing 520K, market house value aroung 900k.

Paid off my variable loan so all my loan now is fixed at 4.74% for 2 more years (out of 3) with NAB.

Break cost is $2,100 which I can save in less than 12 months on a better rate.

I am assuming that rates will stay the same or go down for at least 12 more months.

Hoping to get a rate below 4.00%.

Extra repayments is a must, anything else doesn't matter to me.

Best I could see is UBank at 3.99% and HSBC at 4.01% comparison, does anyone have experience with them? Or recommend another lender? All thoughts appreciated.

Poll Options expired

• 3
  U bank
• 9
  HSBC
• 0
  Stick with current loan
• 0
  Stick with big banks

• 

  CyberMurning on 25/02/2016 - 22:23

  +2

  Another sad story from people who fixed their mortgage. I always told my friends don't bother to fix.

  • 

    supervigilante on 27/02/2016 - 15:50

    Just wondering. Can fixed rates offered by the big4 be used as the prediction guide for upcoming variable rate changes?

    Banks want to make as much money as possible so they have all the finance experts and actuarists work out the best way to squeeze more profits. The bank would then fearmongering people to get the loan fixed by saying that the variable rates is very likely to go up to 5% or 6% or 7%? But in reality, the variable rate is unlikely to be more than 4.74% within these 2 years, as per OP's example. Is this a good guess?

    • 

      BestofOZB on 02/03/2016 - 21:50

      In my experience, yes. If big4 offer fixed rates lower than their variable, rates will stay put or come down.

• 

  thechemist on 26/02/2016 - 09:59

  +2

  I am with HSBC and Westpac and both OK. HSBC has branches so that can be handy compared to U bank. Important thing you didn't mention is whether you were ever looking at renting this house out in the future. If you may do I would definitely go for best rate with full offset account for tax purpose (so you can negative gear more later and save interest now as well). Usually that will cost you 0.5% more but the potential tax savings for the future makes it worthwhile

  • 

    BestofOZB on 26/02/2016 - 10:42

    +1

    Thanks.

    Will live in it till we die, then pass it on to our children :)

• 

  purplelady on 26/02/2016 - 10:01

  +1

  I thought Suncorp wasn't that bad too, but I can't remember how much was the interest rate.

  • 

    tomleonhart on 26/02/2016 - 10:22

    4.15%p.a. (Comparison 4.54% p.a.) :P

    • 

      BestofOZB on 26/02/2016 - 10:43

      +1

      Thanks. Looks high unless they negotiate.

      • 

        tomleonhart on 26/02/2016 - 10:48

        well it comes with an offset that's why. Most likely they won't negotiate.

        3.99% from HSBC is sharp though for a no frills loan :)

    • 

      purplelady on 26/02/2016 - 11:25

      +1

      hahaha.. yeah I was trying to find a way to tag you in this thread lol
      Still don't know how :P

• 

  sagrules on 26/02/2016 - 10:15

  Is this for PPR or investment property? Can someone recommend a good rate for investment property LVR >80%?

  • 

    tomleonhart on 26/02/2016 - 10:20

    Broker here.

    What is the LVR ? and how much is the loan ? :)

• 

  tomleonhart on 26/02/2016 - 10:25

  +1

  out of the 2 go with HSBC.

  • 

    BestofOZB on 26/02/2016 - 10:43

    +1

    Thanks. Still waiting for NAB to come close, if they don't budge we are out.

    • 

      tomleonhart on 26/02/2016 - 10:56

      FYI BOQ is doing 3.99% p.a. (4.13% p.a.) with offset. Might want to consider that :)

      • 

        BestofOZB on 26/02/2016 - 13:07

        +1

        Thanks.

        I usually throw in whatever extra money I have with repayments as I always keep some emergency cash at home anywaus so the offset didn't really help me much before.

        I'd rather have a low rate with no offset than a higher with an offset account, I hope I am not making the wrong decision again (",)

• 

  sagrules on 27/02/2016 - 16:03

  How long is the HSBC offer for? Looks pretty good…

  • 

    BestofOZB on 27/02/2016 - 18:24

    +1

    April 30.

    I am only guessing if the RBA doesn't cut rates next week they will at least stay the same so probably this is their usual rate.

• 

  dumkaze on 29/02/2016 - 11:26

  I am currently paying 4.23 with ING .. Loan amount is about 550K. Is it worth to go to HSBC 3.99 ? I would be looking around 700 of exiting fees and around 700-800 to joining HSBC….

  • 

    naritas on 29/02/2016 - 12:32

    As a general estimate (i.e. not financial advice), with those kind of switching costs you'd probably need closer to 3.81%p.a. to recoup switching costs within a year (ceteris paribus). If you're looking for a way to cover those costs there are a number of very sharp deals at ~4%p.a. that offer an upfront rebate for refinancing borrowers.
    If you wanted a scenario evaluated please feel free to send us a PM.

  • 

    BestofOZB on 29/02/2016 - 13:27

    What about trying to negotiate with ING and squeeze anything out of them if you haven't tried yet?

    I personally wouldn't switch for the 0.25 difference, but push ING a bit.

    BTW HSBC hasn't responded to my second online enquiry, doesn't sound encouraging.