Ubank are reducing their P&I variable rate to 2.49% on 17 July
https://www.ubank.com.au/julyratecut
Fixed rates:
Fixed rates start from 2.14% and they are also waiving the rate locking fee of $395 until 30 Sept.
UBank Home Loan Interest Rate 2.49% Variable Rate (Fixed Rates from 2.14%)
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It's ridiculous. They ask about tiny details that don't matter at all.
Did an application a few years ago. Very good. Was better than CBA.
Tic Toc applications I did in May were fine, other than they couldn't automatically assess my accounts with HSBC, so had to manually upload quite a few things. Ended up taking a couple of weeks to finalise rather than a couple of minutes.
You need to be good at dancing to get money out of tiktok
I've been with Ubank they are pretty decent
Well this is welcome news. I am a UBank variable customer and recently refinanced. Getting another 0.1% off is very nice.
Is it a good idea to fix home loans at this time? What are you guys doing?
Exactly my question right now. I’ve always been of the belief to never fix because you’re essentially betting against the banks (unless you need the certainty of repayments). Banks won’t give money away and they will typically offer rates based on which way they forecast the rates to go (ie if they are fixing lower than the variable they believe rates will drop further over the period they are offering). I’m simplifying, but that’s the gist - there’s other things at play like the extra money they sometimes get from rate lock fees and the benefit from preventing customers to churn.
But there must come a point where we are going to get close to the banks operating costs / minimum margin for doing business. Obviously lower for online banks. Three scenarios:
1. If cash rates drop to 0.00%, best reputable variable rate will drop from 2.39% to 2.14%, essentially matching this UBank fixed rate.
2. The online banks can cut their margin further and offer a lower rate without the RBA cash rate changing.
3. A combination of 1 & 2.
1 and 2 will see you break even by fixing… 3 might see you slightly be missing out on additional savings, but could be a long shot in 3 years.
So overall, potentially a good time to change my perspective about fixing being a bad thing!
That’s my thinking… would love to hear others…I'm very tempted to fix right now - at least most of my loan and leave some as variable to be able to make extra repayments / have the ability to redraw. With UBank getting rid of the $395 fixing fee seems like a good time to do it. If things stay as they are it will save me $3000 over 3 years.
There is a possibility that there will be a big housing crash in September when the government aid is due to finish and also seems like a second wave of Covid-19 could be coming (at least in Vic). I guess that could push the rates down further.
On the other hand the RBA said that they are not planning to lower the rates any further.I’ve always been of the belief to never fix because you’re essentially betting against the banks
Exactly this. I've been borrowing money for 40 years and never seen fixed rate be a good deal. Every single time it sounded good, the market dropped soon after and then it sucked. There are probably cases where people did get a win, but like lotto these would be extremely rare.
Or a simple rule:
- If fixed rate is 0.5% or more below the variable rate and you don't expect rates to fall drastically then fix (RBA said they won't go negative rates)
- If fixed rates are same or only 0.25% higher than variable and you expect rates to increase then fix
I believe even 1 year fixed rates are more than 0.5% lower than variable and rates won't drop any further / we know banks won't pass on full cuts. Fix for short term or split your loan into 2 and fix half.
The only reason to fix is if you need to guarantee what your repayments will be.
I did this with my first homeloan.
Do they offer a cash bonus to refinance?
Nope. They are a low rate lender… most don’t offer this
This explains the long wait time I got from ubank to entertain my home loan application request. Been 24 hours now still no appointment date and time.
Is now a best time to buy a property?
If you have the money.
There is never a bad time to buy property if you are motivated, you are responsible for gains / losses.
Sweet. Formal credit approval in process since mid week for refinancing from ME Bank.
Consultant is on a weeks leave back on 14th :)
Can you make extra repayments with a fixed rate account? Is there any early exit fees after the fixed rate period?
If you can do that then why would people get variable rate mortgage !
I thought it was because the likelihood of variable rates dropping below the fixed rate is why people dont choose fixed? Thats why i had never had a fixed home loan rate.
You can make extra repayments of up to $20,000 over the fixed period. You can also split your loan so part of the loan is variable (that part allows extra repayments) and the other part fixed (allows up to $20,000).
Thanks for the information rafski. Does splitting cost a fee and how much can be split? Sorry to be a pain but does the rate go back to the variable rate after the fixed period? (Ive only ever had a normal variable home loan previously and never had a fixed rate). Thanks again 😀
I don't believe splitting costs any extra. I haven't actually gone ahead yet, just have done a bunch of research as I'm probably going to fix part of my loan shortly. Unfortunately when the fixed rate finishes it seems like it goes to a a higher rate than the advertised rate (it says currently it would go to 3.17% after the fixed period ends). So you would probably have to refinance at the end of the fixed period.
Can anyone confirm if uBank require "Building Insurance" for investment property refinance ?
If its on title then yes - all banks do
Strata would notDefinitely.
Our fixed loan settled with UniBank recently. 2.19% for 3 years and broker commission of .15% effectively coming down to 2.04%, together with the offset I think it's a fantastic deal.
Posting in case anyone wants to compare.
2.04% with an offset account?
Correct
Do tell about the broker commission… how do you benefit from that?
It's at to the brokers discretion. They offer such deals from time to time. You just have to find one that offers it. Believe it or not i found mine on OzB! :)
Amazing! Winning!
ANZ has an offer of 2.39% fixed for one year with an offset account (100% offset). For those who are interested in having an offset account.
The problem with fixed loans is they usually come with setup and ongoing fees and the rate resets to something higher after the honeymoon period.
On ANZ package all fees are waived and you can set your rollover rate to your current variable rate.
Unfortunately, Ubank don’t lend more than 80% of the property value.
man, there website sucks big time though… and always seems to be down for maintenance. anyone else notice that?
and takes forever to transfer cash in and out.Yep, lots of maintenance periods. Website sucks. And seems slower cash in out then when I was with ANZ. But all things I’m willing to live with for saving a shite load in fees
excellently what i was thinking.
It's actually a cookie issue with your browser (because of their bad site). Try a different browser when that happens. It's not actually down, the web site just doesn't handle re-logging into the site..
Actually another quick hack is if you just need to access your mortgage, avoid the uBank web site all together given its down so often.
Mortgage can be access directly through the lenders web site…
https://mortgage.advantedge.com.au/Starnet/UserAccount/Login
They took 2 weeks and gave me a substantially lower amount than agreed.
does anyone know what the "Higher Rate" on the statement is? I have the usual annual Percentage Rates, then there is a higher rate of 6.49, whats that?
Current rates are discounted rates…so once discount rates are gone, you will go back to normal rates of 6.49.
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I just did it, took me the better part of a year (half my fault) because they just kept asking for more and more documents… One of the issues was I was taking a couple weeks paid paternaty leave over a few months, what a head f that was.. so yeah, no better, but should be smooth sailing once your on.