Free $500 eftpos card when you refinance with ubank. You need to be an existing customer but you should be able to sign up for there free online savings account online prior to applying for the home loan.
Terms & Conditions here: http://www.ubank.com.au/ub/ShowProperty/WLP%20Repository/UBa…
Referrer and referee each receive $10 after referee makes 5 settled card purchases within 30 days.
I would say the best home loan rate offer in the current market.
only -ve points are
1) no Mortgage offset available
2) can't borrow more than 80% of property value.
yeah, i think 1) might be a dealbreaker for me…i have approx 40% of my current principle sitting in my offset account.
currently getting ripped with NAB, but i would rather retain an offset account than have to put it all on the loan. i will have to shop around for a better rate with offset account.
cant you just use the redraw option instead of offset?
From what I can see, you can make unlimited additional repayments and redraws for free. I'm still reading up on the implications of redrawing on an investment property loan, but free redraws would give most owner occupiers the same benefit as an offset .. right?
from what i know, you will not be able to claim a deduction once you redraw because the money has already been put into the loan… that's if you are audited by teh ato i guess. they wouldn't know otherwise
Shannoningram, where can i read about this stuff? im currently looking at options of buying a secon property and renting this one out… need to know stuff!
yeah, as above, redraw is an issue for turning principal place of residence into investment property down the track.
also, re unlimited additional repayments and redraws: it is my understanding that you must call them ahead of time (each time) to make extra repayments. plus the hassles of doing redraws (cf. standard offset account allowing instant transactions, and also foreign visa debit transactions with no forex fees using NAB Gold Banking/Visa Debit). offset is just much much more convenient for someone who wants easy access to their money.
if it is an investment property
if the offset amount is less than $200,000 put it in the usaver pays 6.01%
You will still be better off than having an offset with the big 4
If it is principle home then you will have to pay tax on interest earned and will not be able to offset it with interest paid.
shannon is exactly right.
in fact, the amount in the offset account just needs to be greater than the difference between the two home loan rates, divided by the difference between the existing rate and 0.7 (or whatever tax rate) of the usaver rate.
ie. for 6.45% as per the example, if the offset account is more than 9.8% of the principle [(6.45-6.23)/(6.45-0.7*6.01)], then you're better off with the offset account.
in my case of 40% of the principle in my offset, unless i was paying 7.58% or more on my home loan, your advice would be terrible!
That is why i said if it an investment property.
Interest paid on loan is tax deductible so you will not be charged at 30% or what your tax bracket is.
lets compare ubank 6.23% vs commonwealth bank 6.71%
with the current parameters
$250,000 loan
$100,000 offset
interest paid ubank $15,575
annual fee $0
total = $15,575
less savings $6010
total cost = $9,565
lets compare with a loan with the commonwealth bank that has an offset account and 6.71% (wealth package)
http://www.commbank.com.au/personal/home-loans/wealth-packag…
interest paid commonwealth bank $16,775
annual fee $375
total = $17,150
less offset $6710
total cost = $10,440
My calculation is a saving of $875 with ubank + $500 bonus eftpos gift card.
Shannon, you mentioned a bank west loan that has a true offset account can you give me a link of this home loan. does it have any application fees, monthly fees, annual account keeping fees, exit fees? All the offset accounts have some sort of annual fee from my research.
ah i see, sorry i misread your reply.
in any case this is pretty moot, because in my case it is the principle place of residence, so my offset works out significantly better than ubank+usaver.
FWIW, using Bankwest example, for $250000/$100000, investment property:
6.71%: $609.38 difference (+$500 one off bonus)
6.45%: $219.38 difference (+$500 one off bonus)
6.3% would be the break point (which i know people have on CBA, not sure about Bankwest), aside from the $500 one off bonus.
in any case, i think we're on the same page: for the investor, there are potential savings to be had in doing UBank+USaver, at the expense of flexibility/convenience.
Interest only plus offset ftmfw!
The only thing holding me back from refinancing with Ubank is the hassle of calling to redraw. I have no probs if it can be done online.
Guess it depends on how often you redraw. Personally, I've found I only redraw once or twice a year so not too much of a hassle… gonna use this to try and get a better deal out of my current bank
As of today their new 'uHomeLoan' site is running which allows for redraws and extra payments to be done via the online interface… (apparently, im still waiting for my login to be able to see it)
I do redraws twice per month and this is good news. Thanks!! Going to apply now :)
what happened if you just park that 100k extra in the 250k loan, and redraw whenever you need some money for 32GB pen drive?
Minimum redraw amount is $1000. Buy a few more pen drives :)
Nothing stopping you from redrawing $1k, buying your 32GB pen drive and putting the $980 back into the loan.
Except a few dollars of interest if your slow about putting it back :)
where can i go to learn more about offset accounts?
guys read this thread.. dint see anyone mentioning abt the ongoing fees? Usually the banks charge abt $350-$400 annual fee on teh account.. people migth also want to consider that..
n in case your bank doesnt offer offset account as part of the product.. u myt be able to have it with an additional cost of $5 per month or so..
based on my research done a few weeks back for a loan..
yeah, annual fees will affect your effective interest rate. you should take that into account when comparing products, cause you will be effectively paying a higher "interest rate" (interest + annual fee).
the significance of the annual fee depends on the interest rate and the size of the loan. ie. with a 6.45% loan of $250 000 with $375 annual fee you would effectively be paying 6.53% of "interest". on a $100 000 loan, your effective interest rate would be 6.825%!
but on the same token, any money you would have in your offset account is reducing your interest compared to having that money in savings with a non-offset account. and compared to making extra repayments with a redraw account, the convenience of access and potential future tax implications are the trade-off for the (most likely) higher interest you'd be paying.
so one isn't "better" than the other…it really depends on your situation and your needs. (see a financial advisor, etc)
Cool, I applied before the end of Feb and haven't settled yet. Wonder if I get this or the $500 Coles Myer gift card, would prefer this.