ubank Is Not Using Correct Rate on My Home Loan - Are You Having The Same "Issue"?

LCochazoTuc on 22/12/2022 - 16:58
Last edited 22/12/2022 - 17:18 by 1 other user

Hi all, this is my first post (so please be nice :)).

I found out a few months ago that #Ubank was charging me a higher home rate for my home loan (settled on 7/21). It seems they were not taking into consideration my current LVR (~50%) in the rate calculation. Therefore, my rate was higher than the rates mentioned in their webpage for neat or own home loans (P&I). They did acknowledge the error and made the required changes (reducing my rate in alignment to the neat home loans) - so I was happy and I forgot about it.

However, I got the letter from ubank today with the new rate starting on 05/01/23 and they are again not aligned to “neat LVR up to 60%” - so this means that it is very likely that i have been paying a higher rate as it seems its fix was a one-off change.

The difference is big enough (0.15%) so, it is hard to believe this is an unknown issue. So, I wanted to know if you are also experienced the same "issue" with your loan.

How to check:
1- Calculate your LVR for the home loan
2- Check if your current is aligned to neat or own home loan (new loan types)
3- Compare your current rates vs the neat/own home loan
4- If there is a different most likely you are also facing the same issue!!!

Link to #Ubank home loan rates

I’ll be raising this issue with them again, but unfortunately, they have removed the “secure mail” feature – so would need to spend some time on the phone ☹.

Financial Home Loan Ubank

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Comments

  • Master Bates on 22/12/2022 - 17:23

    Is this value at point of purchase or current value?

  • bobbieb on 22/12/2022 - 17:45
    +2

    The simple version of the fine print is on the very page that OP linked to

    Interest rates are applicable at the time of loan approval and are based on the loan to value ratio (LVR).

    There would be more specific wording on the loan contract.

    The interest rate LVR tier is determined when the loan opened. In order to adjust the tier on the fly as you increased the equity, you would also need to ascertain the current value of your property. Given the way property prices are going in many cities, this is a case of be careful what you wish for OP.

    If you really want to be moved to the right LVR tier, speak to UBank. If you wanna lock in that ~50% LVR, you'll need to be ready to lose any cash in your offset/redraw balance. You''d essentially be doing a mini-refinance of the loan to make the "true" LVR 50%.

    • CochazoTuc on 22/12/2022 - 19:36

      I got my home loan approved on July-2021 (LVR was 52%) and this was before the neat and own models were published. so If the old contracts are mapped to neat/own then my contract should be within the "Up to 60%" tier with a rate of 4.79% (as per the link) and I'm currently in 4.89% - which is not in any of the tiers..

      So the main question is: are (old & new) variable contracts following the neat/own rates - or not?

      I'll reach out to Ubank and provide an update.

      • bobbieb on 22/12/2022 - 19:53
        +3

        Your contract will explain what the UBank offers were back in July 21.

        If the LVR tiers, or anything else about the way they market their loans, have changed, they won't apply to your existing loan. If Neat didn't exist back then, then your loan keeps working however it was marketed back then.

        Welcome to the loyalty tax. This is exactly why refinancing is so popular…

      • Zonty on 22/12/2022 - 21:31

        I have same issue with anz , they saying for new customer rates not for existing customers. Load of 💩

      • Edgecrusher on 09/01/2023 - 17:11

        Probably time to pull up stumps refinance and get a cashback.

        Just did it, far easier than it was 15 years ago when I opened my loan.

        You can always go back to UBank later down the track if you liked them.

  • garetz on 22/12/2022 - 22:09

    The whole mortgage industry is a scam, they scam existing customers constantly. The way they do this is they pass on the full interest rate rises, however they do not pass on the full interest rate reduction. Over time you will see your rate be higher and higher compared to new customer rates. Look at all your correspondence with your mortgage provider, and look at the rate changes. Then you will be able to account for the difference.

  • Shadowsfury on 22/12/2022 - 22:33
    +1

    I am legacy ubank customer and only recently noticed the same - that my rate is not in line with the current offerings. I put in a request to have this reviewed - I was given a reference number and told it might take a while but its been about a month already which is long enough even if ubank is having various issues right now.

    I'll have to follow up via phone again soon since secure messaging in the legacy portal has been disabled.

  • El-Rhi on 23/12/2022 - 06:57

    Doesn’t sound like UBanks is calculating anything incorrectly. Your ‘discount’ to the standard variable rate would be the same as when the loan was originated plus the adjustment UBank made when you called (they would have increased the discount slightly). You are not getting the same as the advertised rates because your discount is lower than those they are offering to new customers.

  • bumperplates on 09/01/2023 - 09:11

    I just signed up to uBank and went from 4.49 during the application phase to 4.74 to the settlement phase. What madness after going through the application process as my previous lender was lower. I did receive a cashback bonus, and should have just considered unload.

    • doweyy on 09/01/2023 - 17:16
      +1

      Unless you got a fixed rate, that sounds perfectly fine if you went variable factoring in the extra 0.25% after the RBA increase between the signup and settlement.

      • lachhelix on 09/01/2023 - 17:28

        Exactly - this^ same thing happened to me, they sent out an email/letter advising the rate will/had increased so bumperplates must have missed it

        • bumperplates on 09/01/2023 - 18:19

          I didn't get that email. I only saw the rate increase when I was sent the summary once settlement was finalised. Would Unloan have done the same thing as they were at 4.3 percent - with no cashback mind you.

          • lachhelix on 09/01/2023 - 20:01

            @bumperplates: Yeah afaik all the lenders boosted by the rate increase (or very close to it)

  • Gojkins on 09/01/2023 - 14:44

    It happens, it shouldn't, it sucks. Best way to resolve it is to find time to give them a call. Every time I've had the issue and have called them, they have resolved it quickly. Hopefully the rates stop jumping around soon. (wishful thinking)

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