Bank of Melbourne have dropped their 4-year fixed rate home loan by 0.80%
Available for new loans as well as existing variable rate home loan customers looking to fix all or part of their loans
A first home buyer can have a Loan to Value Ratio (LVR) up to 85%
Where does it say +$4000?
Tempting! Thoughts on fixing OB?
4 years is a long time, based on my experience, 1 or 2 years is OK
Agree. 4 years is a lifetime in this climate.
Yes, reminds me of when they introduced 5 year 4.99% rates few years ago. We all know how that went..
Definitely agree. The issue is that when you setup a fixed loan, the bank in turn gets finance to cover the length of the loan itself. If you decide to change it for any reason, then the bank needs to recover those costs which can be significant if you end it early. Yes it's a great option if you want certainty on monthly payment costs but again you are locked in to the agreement - so no changing banks, no negotiating a better rate….. In general you are also restricted from paying extra amounts into the loan (as it reduces the term), which also in general rules out having an offset account against it. I did it once, and would probably never do it again.
Do you know if its possible to split the loan? I always figured if I ever had the money for a deposit, that it could be worth splitting the loan as 75% fixed, 25% variable, while you pay more for the variable you can stick all your extra cash in there without affecting the rules of the fixed part.
Still though I have a lot of commitment issues, so don't know about 4 years.
Yep. Effectively you end up with two loans, and at the end of the fixed rate term that loan becomes variable and if you want you can change it to fixed again at whatever the rate is then. That is exactly what I did, for three years which was too long. I think that two is probably long enough, although again I doubt I'd ever do it again.
is there any change with the variable rate?
No for most banks
Nope. Bank is protecting the savings account. Maybe
protecting their profits
So would you if you own a financial business ;)
Unless we opt for not for profit banks.
Banks of mum and dad
Resimac are offering as low as 2.29% variable. That's the lowest variable I'm aware of. Virgin Money offering 2.09% fixed for 2-3 years as well, but that's a non-advertised offer you'd need to potentially speak to your broker about.
Both Westpac and Athena offer 2.29% variable and even lower if LVR<=60.
Rule of thumb. Never go for fixed rates if the banks are advertising it. They have smart people who set these rates - it's like trying to win against the banker at the casino(the odds are always against you).
Imagine the rate didn't change in the next 4 years, is it better to lock 2 years with one bank now to get say 4000 rebate and move to another bank to get another rebate 2 years later? I mean on the credit file it will show you change loan every 2 years, is that a bad thing to avoid?
Better or not it depends. Selling the house under fixed interest period - will you come out worse? When you refinance every 2 years, are you borrowing more or less than last time? Is your balance reducing? Are you refinancing OO or IP? Do you need cash flow? What if your income reduced? etc etc
please add tag for HomeLoan as well, makes it easier to see all offers in one page
OP, what is DTI for Bank of Melbourne?
Im currently on a 2.98 variable .. this look good
dont think variable is gonna go below 1.99
It's not only the rate though. If you decide to sell your house in the next 4 years you will have to pay break costs.
just an FYI as well.. if you have a Bank of Melbourne home loan, you get 25% off their home and contents insurance
+$4000 cash back?