Hi ozbargainers,
I would like to ask why there is a difference between the interest rate on my friends home loan and the same product on ING website. The home loan is 3.94% variable interest and on their website ING advertise the same product at a lower interest rate of 3.73%.
I am confused because shouldn't my interest rate be the same as 3.73% because it is variable interest and should be adjusted to this interest rate of 3.73%.
If anyone knows why can you explain to newbie home loaner.
Neg vote for stupid suggestion!
Read the terms and conditions
https://www.ing.com.au/home-loans/mortgage-simplifier.html
We can change the interest rate applicable to your loan account at any time except the interest rate applicable to a fixed rate loan during a fixed interest period
Ideally, tell your friend to read them before your friend signs the loan.
my friends home loan
my interest rate
Or read them before you sign the loan. Whichever is applicable.
Loan variable rates are often described by reference to a base rate adjusted by a set margin. In this case it could be a different base rate or margin. The base rate is variable and set by advertisement, frequently by newspaper. It’s archaic.
It almost always pays to keep checking rates against your charges as banks seem to frequently change the reference base rate to charge complacent customers higher rates while keeping rates for new customers low (ie by keeping the obsolete base rate high).
As WTF says try asking them. There is a retention team that can possibly get you lower rates if you look like leaving.
I previously complained that new loans were lower but they said couldn't drop my rate that low but did drop the rate a bit.
Apart from that each person's rate can be different based on loan package they are in or the amount you have borrowed ie 500k+ might get better rate than 350k. Both of which can give small additional discounts on base rate.
Same here. ING lowered my loan after an half hour call with the retention team, but they wouldn’t go as low as the advertised price.
Does your or your friend come with an offset? It also the size of the loan
no offset
Rate tend to be higher if you have an offset account. Might consider one
Are you sure the variable isn't 3.73% and 3.94% is comparable rate?
yeah 3.73%
Its because the rate on the website is for new loans to encourage people to sign up. You must have take out the loan when their rate was higher.
Its easy to fix - just send them a msg on netbank asking what their fees are for discharging the loan because you are moving to a lower rate at a different bank. Someone from their loans team will call you within 2 days and offer you the lower rate with no swap fee.
I did this with ing a couple of weeks back…
nice i will give it a go
Have you tried speaking to the bank?