This was posted 2 years 7 months 15 days ago, and might be an out-dated deal.

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UBank 3yr Fixed Rate Home Loan (Owner Occupier) 1.85% (CR 2.24%)

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UBank 3yr Fixed Rate Home Loan (Owner Occupier) 1.85% (CR 2.24%)
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Associatedkeithality @ Rate Rank on 05/09/2021 - 09:28 ubank.com.au (480 clicks)
Last edited 05/09/2021 - 11:35 by 1 other user

Looks like UBank have dropped the rate on their 3Yr Fixed Owner Occupier home loan to 1.85% (down from 1.95%). It's now one of the lowest in the market for 3Yr Fixed.

If you are after other fixed lengths some of the lowest for 1Yr and 2Yr:

Loan Rate Link
UBank 1Yr Fixed Owner Occupier 1.79% Ubank
St George 2Yr Fixed Owner Occupier 1.84% (requires $395 fee) St George

Other loans can be found on my rate tracker website: RateRank - Fixed | RateRank - Variable. Note I don't track every single bank, but most of the majors are on there.

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  • UFO on 05/09/2021 - 09:49
    +2

    TicToc (Bendigo Bank) has 3yr fixed owner occupier @ 1.96% CR.

    I normally don't follow or contribute to these types of posts, but just recently refinanced and in my shop around found these guys.

    Had a good experience, they have jack all fees, so thought I'd share.

    https://tictoc.com.au/

    • pyramid on 05/09/2021 - 09:58
      +1

      Their home loan process is smooth but Adelaide bank app sucks big time ..one of the ancient app or internet banking with no payid/instant transfer etc….

      • UFO on 05/09/2021 - 10:13

        I use CBA for all my day to day… been doing so for a long time for that very reason- terrific bank app.

        My house loan is separate, and I don't need anything other than for balance checking or redraw. But I agree, their app is very basic.

    • Chickenleg on 05/09/2021 - 10:13

      Good process? Thinking of refinancing to them as well

      • UFO on 05/09/2021 - 10:19
        +1

        I'm old enough to have gone through the purchase/refinance thing quite a few times in my life. Applying for loans sucks in any language (forensic analysis of your finances is never nice), but this was by far the best process I've gone through. And no stuffing about with in person valuation or having to go into a branch or anything for signing. No regrets so far (been about 2 months with them, but hard part is done).

        • Chickenleg on 05/09/2021 - 10:30

          Cheers for that. I’ve only done 2 refinances so far and they’ve been a decent amount of paperwork so good to know.

        • Kammi on 05/09/2021 - 10:39

          Can you advise what parts were like automatic and what you had to do manually/over the phone etc?

          • pyramid on 05/09/2021 - 12:48

            @Kammi: All payslips etc can be uploaded or sent via emails….final contract is hard copy which you need to print sign and courier it to their lawyers….

            • Kammi on 05/09/2021 - 18:02

              @pyramid: Ah cool. Did they ask for a break down of your living expenses or just look at your bank statements and figure it out?

              Not sure what kind of hassle the online only version introduces

              • pyramid on 06/09/2021 - 14:36
                +1

                @Kammi: I don't think they did…They asked all bank and credit card statements …

    • stirlo on 05/09/2021 - 10:19

      Who's doing 3 year fixed at <1.85% with no fees?

      • UFO on 05/09/2021 - 10:20
        -5

        but it's not 1.85…. its 2.24

        • stirlo on 05/09/2021 - 10:22

          Comparison rate is done on a $150k loan over 25 not 30 years. So it exaggerates any upfront fees and diminishes the impact of the headline rate which has far more impact the larger the loan.

          It's meaningless when people are borrowing between 3-10 times that for the average house depending on your city.

          From the website:

          The Comparison rate is based on a secured loan of $150,000 over the term of 25 years. WARNING: This Comparison rate applies only to the example or examples given. Different amounts and terms will result in different Comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the Comparison rate but may influence the cost of the loan.

          • UFO on 05/09/2021 - 10:40

            @stirlo: Whilst it may not give a true reflection on the actual rate people will pay in their own specific circumstances, it's still a great way to weed out high fees on a cheap advertised rate.

            If they changed the rules to show a $500k loan instead, the difference between a high fee loan and a cheaper loan won't be as apparent.

            That's the reason they keep it at $150k. They can show the headline interest rate for the loan itself (clearly the predetermining factor on large loans), but still show the fees separately in the comparison rate.

            So a low headline rate, along with a low comparison rate is easy to spot.

            If they showed $500k example, the fees would be overshadowed by the interest rate.

            • stirlo on 05/09/2021 - 10:46
              +1

              @UFO:

              If they showed $500k example, the fees would be overshadowed by the interest rate.

              Sure except it would be a more accurate reflection of the real cost of a loan (including fees) for the average person.

              I note you got a 1.96% CR from TicTok which comes from a 2.14% real interest rate.

              If you borrowed half a million and went with this UBank deal you'd pay $9250 of interest a year. Instead you're paying $10700 per year.

              Pretty sure you're not paying $1450 less fees per year with TicTok than UBank…

        • Cupa Bundy Drinker on 05/09/2021 - 11:44
          +1

          I believe UBank has a higher comparison rate because of $395 rate lock fee, which is actually waived.

          Note: A fee of $395 applies on a fixed rate home loan to lock in the advertised rate (as at the date of your application) for a period of time. This fee is waived for fixed rate loans that settle on or between 10 July 2020 and 30 September 2022.

    • Moderatorneil on 05/09/2021 - 11:41

      FYI, Third Party Sites are permitted.

      Third Party Site Guidelines:

      Recent examples of Third Party Site Deals:

      • Associatedkeithality @ Rate Rank on 06/09/2021 - 11:51

        Noted for future and apologies for not marking third party in the original posted

        • Moderatorneil on 06/09/2021 - 22:02

          The info was for TogTogTogTog. You did everything correctly.

  • stirlo on 05/09/2021 - 10:31
    +6

    UBank does not offer an offset which is a big drawback.

    TicToc offers an offset with a $120 per year fee (but has a higher rate) while St George will include unlimited offsets in their $395 package fee. These options are worth considering if you ever plan to use your property for an investment or plan to save money beyond the minimum payment.

    • Cupa Bundy Drinker on 05/09/2021 - 11:40
      -1

      TicToc is not a bank AFAIK, so your offset account is not insured.

    • mrbargain on 05/09/2021 - 12:13

      I used to be with Qudos who had an offset with an everyday savings account and switched to ubank.

      Yes they don't have a traditional offset but any extra money you can transfer to sit on the loan and redraw at anytime thereby still reducing the interest paid, yes it does take a few days to process from ubank to the home loan but coming back is same or next day.

      In the grand scheme of things and over the life of the loan the difference between an offset and the effort of transferring onto the loan is going to be fairly negligible, I also find that having my extra cash out of my savings puts it out of sight for spending.

      Ubank also allow you to do split and variable, so I did variable (higher rate) based on how much savings I knew I had to park on it and the rest as fixed and you can still pay extra onto a fix loan but it is limited to I think 15k total over the fixed period.

      • stirlo on 05/09/2021 - 12:22

        Redraw is useful for some people but there is 1 very important caveat regarding future use of the property as an investment. If you deposit money into the loan and redraw that money in the future, the tax deductible portion of the loan remains at the lower pre redraw balance.

        This means if you buy a house, pay down the loan, then redraw the money to buy a PPOR (or holiday or car), and rent out the first one, the interest cost deduction can only be done on the balance of the loan that hadn't been paid down as the redraw money is not used for an investment. The essentially prevents negative gearing your first home.

        Add in the fact that money in the redraw is only available at the banks discretion, is not protected by Bank Deposit Guarantee, and doesn't allow you to leverage your day to day account balance to reduce interest cost and I'd say for many people an offset is worth the $120 a year.

        • mrbargain on 05/09/2021 - 12:28

          If you were going to change your property to investment for negative gearing don't most people go with an interest only loan?

          The only real issues I have seen with redraw have come during this pandemic with banks switching or freezing mortgages of customers which I don't think was really ethical to do in the first place.

          • stirlo on 05/09/2021 - 12:32
            +1

            @mrbargain:

            If you were going to change your property to investment for negative gearing don't most people go with an interest only loan?

            It doesn't really work like that. Refinancing it to interest only is irrelevant to the ATO. The issue is you voluntarily took money away from the property to buy something that wasn't an investment. Because you did this voluntarily the increase in costs the investment incurs is not tax deductible.

            If you have an offset the money was never attached to the property in the first place. The bank simply agreed not to charge interest on the loan balance and not to pay interest on the saving balance. They're independent from each other in ATOs eyes.

            which I don't think was really ethical to do in the first place.

            Neither do I. But they did…

        • mrbargain on 05/09/2021 - 12:33

          Not sure on this…
          "doesn't allow you to leverage your day to day account balance to reduce interest cost"

          So with redraw, the money is sitting on the loan and reduces the loan payments / interest payable on the loan, you are not earning savings interest on that money which would be taxed - outcome is the same.

          I guess you gotta weigh everything up, I dropped around 1% off my loan and Qudos was unwilling to budge any further so I am (IMO) still better off even though I lost the traditional offset.

          If you are going to pay higher interest or an up to $300 a year fee just for offset vs redraw I doubt it would be worth it unless you have tons of cash stashed away but yeah I totally see your points and if you plan is for investment in the future.

          • stirlo on 05/09/2021 - 12:38

            @mrbargain:

            the money is sitting on the loan

            Only when you transfer it in there. And you can't spend it at Woolworths that evening if you want. With offset every dollar you get paid reduces your interest until you spend it as you can have you main bank account as the offset.

            If you are going to pay higher interest or an up to $300 a year fee just for offset vs redraw I doubt it would be worth it

            Everyone's circumstances are different but if you can get offset for $120pa and a very competitive rate with TicTok it's definitely worth considering.

  • ozzieozzieozzie on 05/09/2021 - 11:05
    +2

    Hume Bank offer offset and redraw on fixed and variable. Rates are very competitive. And they also do construction loans.
    https://www.humebank.com.au/

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