Hello gang,
I am going to switch my mortgage for my investment property (currently getting reamed at 4.8% with no offset).
What interest rate is your mortgage at the moment and with what lender? Or what is the best rates/deal you're aware of at the moment?
Cheers!
4.01% investment loan
3.76% OO
westpac
Fixed?
variable
Premier Package?
@Shibuya:
i dealt with westpac directly from a refi from CBA. i said a broker could give me 1.5% off the SVR. so whats your best and they gave me 1.69.
3.9% OO - no application or ongoing fees
$1000 cash to sign up
Offset arrangement
Approx 70% LVR, Loan total is 500k-$1m range
NAB - negotiated directly after getting similar offer from Westpac broker (and showing evidence)
HSBC
3.75% Interest only (no principle)
Primary residence
100% offset
75% LVR
No yearly package fees or monthly keeping fees
Borrowing about 1.7M so that might explain
1.7M and paying interest only… That will be one hell of a long ride. I feel your pain!
Don't feel too much pain - interest only gives him/her the ability to use the most in the asset class that has the highest expected return - and if that asset class is the homeloan - there is the offset account there. Also the flexibility down the track to rent out the property and maximise deductions.
That is very good rate. How easy to find ATM for HSBC?
Hi Guys,
I am stuck with CBA's fixed rate loan on ineterest rate 4.9 on a 5 year fixed rate.. Its already close to 2 years now.
Need to get out and go on variable rate on another bank but not sure how to break it considering CBA charges on breaking charges.
Any advice pls?
If variable interest rates move against your fixed rate (that is, drops below it), then ALL lenders would charge a break fee - this is the loss from the difference in interest rates for the remaining fixed period. There might be other fees on top of this.
On the bright side, if interest rates had risen to 7%, for example, you would have been better off with your lower fixed rate.
Moral of the story: you can't have your cake and eat it too (you can't have the best of both worlds).
Thanks - I understand.
But, want to move away from this and fix it with another bank for a lower rate if you know what I mean.
I guess I will save money then?
Why don't you get a quote and calculate how much your net payments will be for the rest of your 5 year term and compare this against the break fee and any other fees on top of this (exit fees from current lender and application fees from the new lender, mortgage stamp duties).
I wouldn't really fix in the current market, especially if you have a large loan…way too unpredictable imo, at least split your loan but don't fix it all.
Yeah, I have split it.
20% variable and 80% fixed
I would encourage you to do this ASAP. The more the interest rates drop, the higher your exit fees will be. We all agree that interest rates will drop, the only question is when and by how much.
1- Ask CBA for exit fees estimate now , and if the rates drop by 0.25 bases (likely to happen before you refinance). Lets say $8k.
2- Decide what bank/rate you are likely to go with, lets say 3.9%.
3- Based on your loan size calculate your new monthly repayments, lets say 3k.
4- subtract your new from current repayments, lets say 3.5k-3k, thats a saving of 6k a year.
In this case, over 3 years you are LIKELY to save, take the risk and break.
If numbers don't add up then stay with your current rate.
Rememebr again, the longer you leave it and the more the rates drop, the more you will have to pay to exit (can even double with as little as 0.25% cut).
Good luck.
Thanks a lot for the detailed advice.
I heard with CBA alone, the way breaking works is you apply it on a date when the break fee is low and it might be approved/processed in say 7 days.. then the break fee applies when they process it which is really annoying as it might increase even more.
Thats the only concern stopping me.
Sounds a bit strange, the way I know it is the final break fee is calculated on the day of the settlement of the refinance, i.e you really have no comtrol over it except for a ballpark figure. If there is no change of interest rate, the cost they give you would only vary slightly.
I just changed my home loan through the broker,the broker was awesome.I got 3.75% fixed for 2 years for my own house,and 3.99% for my investment house.
Not only that,I also got $1250 cash back from the bank and $2200 cash back from the broker.Use the cash back money brought a 65inch TV,really glad with the broker.
Who was the lender and who was the broker?
Who is the broker? if you can share broker details or PM me, I will appreciate that. Thanks.
Good broker. Care to share ? PM Please ?
Can you please share broker details or PM me, so you can help OZ bargainers as well as your GOOD BROKER.Thanks
Hi,would you PM me for your broker details.
Thank you
Pleeeaase :) Pretty please!!
care to share the broker details?
Looking at your numbers I think I got a similar deal to you. Fixed 3.69%p.a. for 2 years & my variable should be around 3.8% because of the rate drop. Got $3000 at settlement between broker and lender. Used Naritas from this forum. They were great.
Must have been a large loan amount for broker to pay you back that much :)
Hi fellow Ozbargainers,
Broker here. This sounds like ANZ. That is only available on FIXED rates and it revert to a rate much higher after 2 years, as ANZ has the lowest discretion discounts from the BIG 4. Max 1.2% off. That means more fees after 2 years.
Their current promos are on break-free package 2 years - 3.75% o/o and 3.99% investment. Great credit policy though on maternity, simplicity in cross-collatoralisation, spousal servicing guarantee (can have title and laon in one spouse and other spouse is almost like 'invisible' servicing guarantor) and ability to act as gurantor to anyone (does not need to be a son/daughter or family).
Hi Sam,
I am with westpac and I am going to switch my home loan to better rate
any suggestion please
Thank you
Hi,would you PM me for your broker details.
Thank you
Currently with ANZ … one owner occupied mortgage at 4.08%, and one investment property at 4.34%.
In the process of shifting to ubank (3.74% owner occupied, and 3.96% or something for investment). I like the fact they're saying there are absolutely zero fees.
But yes, the number of documents I'm in the process of uploading is ridiculous.
I too am with ANZ and I get 1% discount yet my OO is 4.37% and ip is 4.64%. I am looking to move.
I'm leaning towards HSBC. Owner occupied. 3.85% variable. $300 - $400 establishment fee. No ongoing fees. Offset account.
HSBC were willing to loan me more compared to UBank.
The UBank employee wasn't very helpful or friendly.
Nice one in scoring the offset promo at 3.85% without ongoing fees. Usually HSBC tries to slug you with their HSBC Premier package which is a $35 a month fee. Did you have to negotiate to get out of that?
Yes, simply asked them to waive as much as possible. Helps if you know someone there as well :)
No one here is quoting the comparison rate of their loans? why?
Because comparison rate only works if everyone has the exact same loan amount/product.
I joined BigSky Bank and am currently on 4.02% as at 31 May 2016. 100% Offset and no fees ever. At the time it was lower than UBank. As an added bonus, they offer a Visa credit card with cashrewards ($200 = $1) and the interest rate on the credit card is the same as the home loan.
They offer an app to move money around your accounts instantaneously and you can withdraw cash at any NAB RediAtm.
And after 2 years you become a member of Australian Unity.
The only catch was that you had to be employed by certain companies, but worth giving them a call to find out if that is still the case.
Even though UBank has gone lower, I will be sticking with BigSky.
As with a few others, Loans.com.au
3.74% variable, principal place of residence, no fees. I did have 80% LVR
No offset, but as with others, it behaves like an offset - reduces interest but I can schedule payments out of the mortgage account, paypal can debit the account. I did have a loans.com.au offset account on my last mortgage, but without it is easier. Just one account to worry about.
Their internet banking works fine. I bought a car last week so transferred the money (>$20k) without hitch.
As with others, if you decide to go with loans.com.au, I can send you a referral link which credits my account with $450.
3.85% var, full offset, completely fee free. 3.85% comparison.
which bank?
Corporate package ;)
Westpac 4.23 with 100% Offset. Owner Occupier. 85% LVR
I'm coming off fixed rate soon and seriously giving Reduce Home loans some thought. 3.69% comparison rate with offset or 3.59% without. 80% LVR limit.
Another UBank customer here @3.74% Owner Occ
Swapped from ING about 3 years ago. Transfer was painless. Was on a slightly higher rate till recently, but e mailed Ubank, asked for their current discount which brought rate down to the 3.74% and they did it. Took about 2 weeks, but they backdated the discount.
I often overpay / redraw, and for me it's no hassle, so no major drawbacks from offset (that I had with ING).
(Incidentally I asked ING to match the UBank rate before I swapped - but they said no way )
i just got my loan approved for my IP, the rate isnt that competitive.
how long should i stick around before i can refinance?
just want to get this through first then switch few months later?
3.92% with Ubank Owner Occupier (OO)
4.14% with NAB - Investment Property (IP) - Interest Only, Variable. (plus $ 395 fee for package)
I'm thinking to move my current OO loan to NAB so I can get a better deal (under 3.92%).
It seems Ubank charges different rates to different customers, depending whether your loan was approved during a promo period or not.
Does anyone know if you could negotiate a lower % interest rate with Ubank?
I have been with ubank since 2013 and have rang them twice asking to be given the lower rate published on their website and they have given me the lower rate on both occasions. My rate is currently 3.74%.
what!
i emailed them but they said 4.09 is still a pretty good rate! and i said fair enough.
I emailed ubank as well and they called and told me that it was not viable to give me the 3.74% rate
At first I emailed them too and from memory I think they turned me down. Then I complained and threatened to leave (via email) and they explained to me that if I ring them the CSRs are authorised to "apply" for the current discount to be applied. So I rang them and it wasn't an issue at all.
The next time I did it I didn't bother emailing because I knew it would be a dead end and went straight to calling them. Had no issues going through the same process again, that was about 3 months ago I think.
Definitely worth picking up the phone and giving it a go. I assume due to the "applying" and getting an answer back in 3-4 days it means they look at your account history and assess your risk etc so the application may not succeed for everyone.
@chiefbodge: Agree. I called ANZ and they gave me discount first time about 0.30% and then after few months called again and they gave me discount of 0.05%.Currently paying @4.17% with breakfree package with $395/year fees.
4.15% with offset
4.32% NAB (IP) interest only and $10 a month for the account fee with offset account
Mine's 3.99% with CBA fixed for 2 years. For all fixed loans, there's a partial offset of 10k per year. 4.07-4.17% for variable depending on the day.
The lowest I saw was 3.74% with uBank but OP was asking about investment property so not sure where all these low figures were from. I could not get a rate below 3.90% for investment.
I didn't go to uBank because everything is online. I'm willing to compromise 0.09% a year for service.
A mate of mine is on 3.74% @ 80% LVR , investment , no annual fee with NAB
ANZ with 4.13% + annual package
CBA with 4.00% + annual package
One is investment property but bank don't know it is investment property.
excuse my question, just bought myself an IP, how do you claim your tax for IP then?
Claim the interest that has been paid against that loan from the bank statement.
interesting, does this mean i can do the following?lets say i combined my current loan size my OO (70k) and IP (30K) then refinance it to other bank, and split the account to the following portion 30 (OO) : 70 (IP) and claim the IP interest against my tax?
@ishe: Nope.
I was living in current investment property when loan has started.
Moved the bank and didn't inform existing bank.
New bank know that I have a loan but old bank do not know that I have additional loan.
Hope it make sense.
PS: Once you pay of your loan (not offset account); the money withdraw to buy OO house is not tax deductible.
You can withdraw from Offset Account anytime.
the best I could get out of CBA was 4.1% on $395k.
4.48% Owner Occupied. I win. The End
lol
I don't think it's offered any more, but I'm with Suncorp, 4.06% with 100% offset (up to 10 accounts) and no fees for life of the loan (no annual package fee or application fee). Owner occupied.
Caution
I just moved from NAB because they can't offer me the rate that Citibank can 3.88% variable + annual package fee.
NAB blocked and delayed the settlement. NAB said there was an error on the papers to buy time to convince me to stay. Citibank couldn't settle on that day because they were told by NAB that customer (me) decided to stay - a lie. I had to make a few phone calls. The moment they can't make you stay you get cold shoulder from the banker, phone call ended without saying goodbye from banker.
The settlement was delayed but settled in the end.
It sounds like I have the worst package out there. I knew I should have switched years ago.
Mine is 3.69% fixed for 2 years with $2000 cash back from NPBS and $1000 from broker.
My broker offers a loan reducer offers 2.25% for home, and no higher than 5.25% for investment loan (which can be shares, investment property or commercial property). It is a great product for those who invest in shares. You get RBA cash rate plus 0.50% for your home loan and much sharper rate than margin loan.
How does Loan Reducer Work?
The system operates with a floor rate on the owner occupied loan and a ceiling rate on the investment loan.
The floor rate is the lowest rate that can be applied to the owner occupied loan interest rate and is based upon the RBA cash rate plus 0.50%
The ceiling rate is the highest rate that can be applied to the investment loan interest rate and is capped to the RBA cash rate plus 3.50%
MyState
$300k mortgage on a $500k property
3.99% Variable
100% Offset
$8 a month for the ofset
None bank lender offer 2.8%
Can you share the non bank lenders name and some more details about the loan
4.17 with anz wealth package, comes with offset redraw etc for $395/yr. essentially 1.2% off the base rate
recently bailed on homeside (NAB broker arm) - best they could offer was 4.5% on $360K with full offfset.
IMB straight up offered 4.25 and negotiated down to 4.1% fully variable, no fees, with offset.
4.19% with offset.
Who with? Owner or investor?
as above: owner. 100% offset, no est fees, 1.19% life of loan discount, brick & mortar bank. All I had to do was cover govt charges.
out of interest NAB offered me 4.5 down from 4.68% + $1500 cash to stay when it came down to it.
this IMB loan:
http://www.imb.com.au/personal-home-loans-what-we-offer-vari…
With CBA and owner.
im with loans.com.au offset at 4.240%. How much will they charge me to exit and switch to another lender? How do i push them to lower my rate? Its a bit of a joke its much higher than a rate for new customers.
Is it risky to go with non-bank lenders? What if they default? Surely the low interest rates come with higher risk
Is it risky to go with non-bank lenders? What if they default?
This is a completely valid concern. If you're looking for peace of mind, any lender that is covered by the Commonwealth Guarantee on Deposits would be a good place to look. As you can see from the list you're not only talking major banks, there is a considerable number of credit unions, building societies, mutuals and small banks to choose from.
Surely the low interest rates come with higher risk
Many finance industry commentators would agree with you. Borrowers seeking loans with offset accounts are usually willing to pay a price premium for the benefit of dealing with a financial institution that is covered by the Commonwealth Guarantee on Deposits and has a reputation for being financially robust.
That being said, there is nothing wrong with promoting competition in the finance market by considering a smaller lender. If you'd be willing to look outside of the Big 4 to choose a home loan you'd be surprised how many great lenders there are.
You're borrowing from them, so you don't have any default risk. I don't know about them calling in the loan early or raising interest rates, but you should be aware of exit costs and refinance if necessary.
If they default wouldn't that be a good thing for you as you do not have to repay them anymore?
@wildstone unfortunately that is not how it works in practice.
In practice, the loan book is typically sold to a new entity. If you're on a variable loan the rate may change at that point, similarly, depending on the contract the borrower has committed to, loans may be randomly selected for review. A recent example from the past few years can be taken from the CBA acquisition of the Bankwest commercial loan book. At lot of developers found themself in hot water when they found that the new CBA management were seeking to change rates, fees and not renew or extend finance lines (sometimes in the middle of construction projects). These dramatic and sudden changes happened, in part, because they disagreed with the assessments made by Bankwest staff in earlier months.
What is the take away? If your lender goes bust you need to be hopeful that you can quickly and cheaply refinance elsewhere. Why? Because the new owner of the loan book (i.e. owner of your debt) may call in the debt or change loan terms dramatically in a way that does not favour your budget or your needs. Furthermore, if you have a sophisticated product such as a home loan with offset account, the funds sitting in the offset account may be the target of your financial service provider's creditors. In practice, the Commonwealth Guarantee on Deposits protects many consumers from this risk. Many online and microlenders do not enjoy that protection as they are not licenced banks and do not have to abide by the financial strength tests that APRA sets out for banks.
Hope this helps.
Thanks naritas.
So to sum up and simplify per se, if we just have basic loan product where we just repay the lender every month and has no features (and with reasonable or no exit fee), the risk should be minimal?
If the lender goes bust, all we need to do is to quickly refinance the remainder of the loan to another lender. Correct?
You're most welcome.
if we just have basic loan product where we just repay the lender every month and has no features (and with reasonable or no exit fee), the risk should be minimal?
Assuming you are a good candidate for approval with another lender at the time your present lender goes bust or is sold, then the risk is relatively minimal. However, we're making a couple of important assumptions here:
a) That you are just paying the minimum each month (i.e. with no funds in offset and no redraw capacity).
b) That you have a rock solid credit profile. For example, if you change jobs frequently, have property/collateral that is unique or may not value well, have pushed your borrowing capacity to its limit or are planning to have children…there is a risk you may not qualify for the same loan with another lender.
Now, that's not to say one needs to primarily focus on such risks ahead of price & functionality. Not at all. It is simply a factor to consider when weighing up options. Our general position is that the challenger brands to the Big 4 are great for the Australian finance industry. As long as borrowers are properly informed on the pros and cons, challenger brands present some exciting and valid alternatives dependent on a borrower's risk profile :)
@wildstone:
Our pleasure. Best of luck with the research. Please feel free to send us a PM if you'd like any help.
I rang Westpac and Commbank today to refinance my ~$110k outstanding loan with Aussie home loans (Currently @ 4.69%) into a $125k loan to allow some redraw.
Westpac: 3.75% (normal rate 4.78% with fixed 1.03% discount for 2 years, variable with the rate - if rates go down, mine does too), no establishment fee, $350 closure fee to roll into a new deal.
Commbank: 3.94% for first three years, $700 signing bonus, no establishment fee, $325? closure fee to roll into a new deal.
Just need to speak to Aussie and see what they'll bring to the table.
May I ask if this is Owner Occupied or Investment ? I am looking good rates for Investment property. Thanks
Owner occupier.
Hi fellow OzBargainers,
Best mortgage deals that I am aware off and doing quite a bit as a MFAA accredited finance broker are:
*Homeloans ltd 3.79% p.a and 3.99% on investment. Stand alone loans with no cross-collateralisation. Ability to cash out for business purposes at residential rates.
*NAB discretion pricing. Also sharp fixed rated. 2 year- 3.75%, 3 year- 3.89%, 4 year- 3.99%. They will currently price more aggressively than any other Big4 and also have $1500 cash refi on investment or owner-occupier OR 250,000 velocity points (o/o only), if loan is approved by 31st of July 2016. Have been negotiating some insane rates, even on 250k of lending.
*BOQ 3 year fixed at 3.69% p.a that can be split with a 3.99% variable 100% off-set
*Vow Home Loans (by Macquarie) 3.85% (3.85% comparison) with 100% off-set and no ongoing or upfront costs. Can also cross-collateralise your investment property to get the same rate. Has to be sub 80% LVR overall. Similar deal with AMP Bank, but it does have an annual$395 package fee. Both o/o and investment under 4%. Prefer the Vow product, as Macquarie has a lower qualifying rate and I find their maternity leave policy useful PLUS quick approvals and good service.
*Teachers Mutual excellent long-term fixed rates with 100% offset on 3 or 5 year fixed rate products. Only available for teachers and friends/family of teachers.
*Citibank pricing. Have seen as low as 3.84%, as long as lending is 500k plus over all. Good option if trust structure lending is involved.
Respective comparison rates on lender's website. However, those are obviously based on 150k of lending.
Hope this helps some of those looking to re-finance.
Regards,
Salmir- Sam
Pro Finance Solutions
hi Sam
What sort of pricing are you getting from NAB on variable for owner occupied and investment property?
cheers
Split - 5 year fixed 4.30% & Variable 3.85%