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St George 5 Yr Fixed Interest Mortgages 4.49% (Loans 150k+)

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St George 5 Yr Fixed Interest Mortgages 4.49% (Loans 150k+)
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Mike_Mav on 11/02/2015 - 10:19 stgeorge.com.au (200 clicks)

Just when I thought fixed rates couldnt get lower, St George have dropped their 5 year fixed rate by 0.50%. Loans need to be over 150k and you must be an advantage account holder.

Fixed Rate Home Loan
Get an Advantage Package* discount on Balances $150,000+
Term Annual rate Comparison rate1 (secured loan) Advantage Package* Discount Fixed Rate with Advantage Package* Comparison rate1
1 year fixed 4.84% p.a. 6.04% p.a. 0.15% p.a. 4.69% p.a. 5.61% p.a.
2 year fixed 4.74% p.a. 5.91% p.a. 0.15% p.a. 4.59% p.a. 5.54% p.a.
3 year fixed 4.64% p.a. 5.78% p.a. 0.15% p.a. 4.49% p.a. 5.45% p.a.
4 year fixed 4.84% p.a. 5.74% p.a. 0.15% p.a. 4.69% p.a. 5.46% p.a.
5 year fixed 4.64% p.a. 5.58% p.a. 0.15% p.a. 4.49% p.a. 5.34% p.a.

Financial Home Loan Loan

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St.George Bank
St.George Bank

closed Comments

  • [Deactivated] on 11/02/2015 - 10:24

    Interest rates are expected to drop another 0.25-0.5% over the next few months so that is why fixed rates are dropping.

  • DealzEddy123 on 11/02/2015 - 10:28
    +1

    wats the annual fee for advantage package?

    • Mike_Mav on 11/02/2015 - 10:30

      395 p.a.

  • dasher86 on 11/02/2015 - 10:28

    what are the annual fees for this product?
    What are the features for this product.
    Mortgages are so complicated that the information provided isn't enough to determine whether or not this is a good deal.
    Fixed rates could be a 'deal' but annual fees, set up fees could otherwise kill it.
    Comparison rate provided but what is it calculated on?

    • Turd on 11/02/2015 - 10:35

      They are actually quite easy if you read the PDS's.

      • dasher86 on 11/02/2015 - 10:45
        +1

        my point is that a summary of these should be included in the deal narrative. so we don't have to all trawl PDs on every single deal posted.

        • Turd on 11/02/2015 - 10:51
          +4

          People shouldnt rely on being spoon fed, esp for Finance and Investment issues.

          ALWAYS AND ALWAYS find the PDS yourself and read all of it yourself and if you do not understand ask for professional help.

        • dasher86 on 11/02/2015 - 11:02
          +4

          @Turd: it's not about being spoon fed, nor is it about being spoon fed for finance and investment issues.
          I am referring to general posting guidelines. The information posted is not enough to determine whether or not it is a good deal.
          https://www.ozbargain.com.au/wiki/help:deal_posting_guidelin…

          Obviously you should read PDS yourself and seek financial advice.

  • bargainshunter on 11/02/2015 - 10:29
    +1

    Fixed rate should be think of as an insurance rather than betting on variable rate will increase. You should expect banks to know better about interest rate movement than us knowing it.

    Also, I am with ANZ and my variable rate is 4.38% at the moment so that gives you an indication of how St George managed to get that 'discount' rate.

  • shadowarrior on 11/02/2015 - 10:30

    Not a good time to lock into fixed rates.

    • dasher86 on 11/02/2015 - 10:34
      +2

      how so? just because rates are dropping it isn't a guarantee that they won't rise again in 2/3/4/5 years.
      rates are at historical lows are they not?

      • shadowarrior on 11/02/2015 - 11:04

        And that's when the Banks will try to lock you in if they sense a further drop incoming. Our economy isn't booming atm. There is a possibility of further drop. The best thing to do is enjoy the low rates till you can, and at the whim of the first raise, lock it. Interest rates don't go up by leaps, so you enjoy the low rates till you can, and then lock it in with maybe 1% above the so called historical low.

        • Coley on 11/02/2015 - 11:16
          +4

          Good luck locking it at the "whim of the first raise". The banks are not idiots and have a lot more data to look at then the average home owner. Banks will always adjust rates up long before you realize there is a "whim".

        • Denaz on 11/02/2015 - 11:41

          @Coley:

          I wouldn't say that they aren't idiots, but yes they are able to better predict what is going to happen :P

        • Snoopy113 on 11/02/2015 - 12:12
          +1

          This comment is insane! Fixed rates from a bank are based on what their outlook of the future is. Unless you beleive you know the future, or you have some earlier access to future market rates than a bank does, your strategy is completely ridiculous.

        • shadowarrior on 11/02/2015 - 12:34

          @Snoopy113:
          The ridiculous strategy can be made possible simply by following world economics news and having high school level understanding of how economics works and how governments react at certain situations. Where I come from, high school education is basic, a bachelors degree is mandatory. So we rely on analysing the situation rather than blindly following what a bank posts as a 'great offer'.

          If you have a business or have a house or investment property or looking into getting any of these, the market research you do before you enter the commitment includes not only about product/competitor etc but also world trends and economic conditions which can affect your decision.

        • Snoopy113 on 11/02/2015 - 13:24

          @shadowarrior:
          Your strategy still assumes that you have the same or better access to market information than the the institution that is setting the fixed rate at that point in time. If you think the pricing department of a bank sits around and talks about google news or the healine story in the financal news paper you are wrong. Trying to cover up your lack of banking knowledge with your degree that almost everyone else in this country has didnt work.

        • shadowarrior on 11/02/2015 - 14:04

          @Snoopy113: Are you telling me that you do not have skillset to search what's going on in this world? Google news is not the only source. Or are you telling me the banks have a crystalball.exe they run every day to make their decisions?

          The information, is always the same, that doesn't change. How you interpret the information does. A person who specializes in financial planning will have way more tools on how to utilize the information, an economist will have way more strategies and examples to use than a general person. If you don't have time/interest in knowing about this, you can simply follow the preset instructions banks give you.

          Your car needs an oil change, the mechanic knows this, so does you. You chose to not use this information effectively to act on it, where as the mechanic could take this information and act on it using his acquired knowledge and skill set.

          Follow stock market reports daily, tally it with business decisions being published, see how they are affecting each other. Follow government policies and see how it's affecting or previously affected the country's economy.

          I am sorry to assume everyone should have the basic skill set of gathering data and analysing it for themselves first before talking to a financial institution or professional. And it's not just for financial decision. It's my money, I want to be informed about the situation before I talk to someone, instead of blindly following their instructions. I forgot, people like you still exist who throw their hands up in the air as soon as you see a fused bulb and call the electrical engineer to come and formulate a professional plan to replace it. Pardon my ignorance.

        • Snoopy113 on 11/02/2015 - 14:24

          @shadowarrior:
          Simply put - Banks have trading desks with up to date market rates that tell them were they can transact at, at that point in time. Again, if you think that your information gathering skills will give you a superior result of how market rates will move than a that of a trader with a bloomberg terminal than you are most likely wrong, and if you arent, you are most likely a billionaire.

      • bargainshunter on 11/02/2015 - 14:18
        +1

        Didn't people say the rate was at historical low 16 months ago? And if so, they are now burnt if they fixed for 5 year back then.

        • SirFlibbled on 11/02/2015 - 14:25
          +1

          It's a risk you take with locking in the rates.

          I'm locking in my homeloan (which will settle eventually) because my wife is studying and I'm the only income source so I need to be able to budget properly.

        • bargainshunter on 11/02/2015 - 14:37

          @SirFlibbled:

          That's exactly what I meant. You only fix rate as a insurance (i.e. for certainty). It probably will be more expensive than variable rate, but it means you won't get burnt when the rate increases by say 1% and you can't afford the loan so you lose your house!

          Great decision!

  • Turd on 11/02/2015 - 10:36
    +1

    Chinese investors are taking over the place anyways right? Isnt that what everyone is saying?

  • crooko on 11/02/2015 - 10:39
    +1

    When banks start advertising fixed interest rates, this is when you DO NOT lock in.

    ANZ 4.38% great rate, I though 4.88% was their best rate with Breakfree package (soon to be 4.63%)

    • virtualds on 11/02/2015 - 11:14
      +1

      4.38%..where is that? I cannot see that anywhere!

      • naira on 11/02/2015 - 11:52

        I was with ANZ and at 5.08 on Nov 2014. I asked them to price match suncorp at 4.69% plus no package fee and they told me I was getting a very good deal. I doubt they will even give 4.38%.

        • bargainshunter on 11/02/2015 - 11:56

          Good luck for ever asking a big bank not to charge you a package fee.

          It all depends on your loan amount. 1% off SVR was standard as long as your loan amount was 500k+ so you should be on 4.88% back in 2014 if your loan amount is more than 500k.

        • thydzik on 11/02/2015 - 14:12

          @bargainshunter:

          nab northbridge has been known to remove the package fee if you ask each year.

    • bargainshunter on 11/02/2015 - 11:39

      Sorry, I included the 25 bp cuts that kicks in tomorrow. So I got 1.25% off their SVR.

      It is not advertised rate. It all depends on your loan amount and how much are you willing to bargain.

      I repeat my statement, fixing rate should be treated as insurance rather than betting on interest rate will rise. The banks always know better than us!

    • montorola on 11/02/2015 - 11:49

      So when do you lock in, when they don't advertise? :S

  • Russ on 11/02/2015 - 11:00
    +2

    OP, it's misleading of you to publish the interest rate only in the headline, without showing the comparison rate. The banks themselves aren't permitted to do that, they MUST publish the comparison rate as well. Only the interest rate shows up on the OzBargain "Deals" listing.

    Also, the comparison rate shows that this is a lousy deal, they are just milking you through fees instead of through interest. Loans.com.au currently has 3-year fixed at 4.33% comparison rate, which means your interest repayments will be about 20% lower than StGeorge (comparing 3-year 5.34% at StGeorge with 4.33% at loans.com.au).

    At the start of a home loan, the interest makes up more than 90% of your total repayments, so it's a big difference.

    • Coley on 11/02/2015 - 11:10
      +3

      "means your interest repayments will be about 20% lower than StGeorge"
      Wow. I'd love to see more details on how your worked that one out.

      Also, people should not get carried away with comparison rates. They are basically useless and can be very misleading themselves. They are really only relevant to the standard loan scenario that they have to use.

      You would be much better off using one of the online tools where you can type in your loan amount and the loan fees, interest rates etc and the site will give you a comparison rate for YOUR scenario, a much better tool for comparison.

      • Russ on 11/02/2015 - 12:07

        Wow. I'd love to see more details on how your worked that one out.

        As quoted in my post above:

        comparing 3-year 5.34% at StGeorge with 4.33% at loans.com.au

        Annual interest on 150k loan @ 5.34% at StGeorge is 150000 x 0.0534 = $8010
        Annual interest on 150k loan @ 4.33% at loans.com.au is 150000 x 0.0433 = $6495

        Note the $1515 defference, that is the "penalty" you would pay with StGeorge, and it is larger if your home loan is more than $150k.

        $6495 is about 80% of $8010, so the difference is about 20%. For the exact calculation, 6495 / 8010 x 100% = 81.09%, so the difference is 18.91%, which is "about 20%"

        • Coley on 11/02/2015 - 16:52

          You may want to brush up on what comparison rates are exactly if your going to be calculating your future finances like that. Just sayin :)

    • Snoopy113 on 11/02/2015 - 12:07

      The comparison rate on this fixed rate homeloan (and almost all others) takes into account you being put onto a variable rate after the fixed term is over, hence why the comparison rates can be so much higher than the headline rate. Theres nothing stopping you from changing your loan after the 5 years is up. So the only cost you should be taking into consideration when comparing to other loans is the $395 annual fee.

      • Russ on 11/02/2015 - 12:12

        Wrong. By government legislation, the comparison rate must include all fees and charges over the duration of the loan contract - which is the fixed term.

        • Snoopy113 on 11/02/2015 - 12:19

          Of course it does. That is obvious. What isnt obvious is what i was explaining. I cant see where I am wrong?

        • Russ on 11/02/2015 - 12:34
          -1

          @Snoopy113:

          From your post

          The comparison rate … takes into account you being put onto a variable rate after the fixed term is over

          The variable-rate loan AFTER the fixed rate loan, has no impact on the comparison rate for the fixed loan. Your post implies that the comparison rate for the fixed-rate loan is somehow higher because of the loan that comes after it.

          I mostly agree with the second half of your post, but if you are going to be changing loan providers every few years (to get the best rates), then you should also add the start-up fees and shut-down fees when making comparisons. Some loan providers at the discount end of the market won't pay these fees for you.

        • Snoopy113 on 11/02/2015 - 12:53
          +2

          @Russ: Oh dear, you need to look into this more because you are wrong. The Comparison rate DOES take into account the variable rate you are thrown onto at that particular bank. Thats why in the small print it mentions the comparison rates tennor of 25 years. Do you think the comparison rate is based on the rate of fixing for 5 years + 5 years + 5 years and so on?

        • Russ on 11/02/2015 - 13:04
          +1

          @Snoopy113:

          Oops, you are correct. From the National Credit Code,

          The warning may be given in conjunction with the basis on which the comparison rate is calculated, that is, that the comparison rate is accurate only for the specified amount of credit and specified term.

          I had though the specified term was the "fixed" term, but it could equally be interpreted as the term of the loan, and I just checked StGeorge and Loans.com.au, they both the term of the loan.

          National Credit Code found here:
          http://www.austlii.edu.au/au/legis/cth/consol_act/nccpa20093…

    • thydzik on 11/02/2015 - 14:13
      +1

      comparison rate doesn't mean much for fixed rates as it takes into account the variable rate for the remainder of the 25 years.

      it is better to calculate the comparison rate yourself over the fixed rate period, and use that as a basis of comparison.

    • Mike_Mav on 11/02/2015 - 14:57

      Are you able to explain why the comparison rate for loans.com.au is lower than the headline rate? It doesn't make sense to me, unless they pay you loan fees?!

      3 year fixed 4.48% p.a (4.33% p.a comparison*)

      https://www.loans.com.au/home-loans/Dream-Loan-Fixed

      • marty260 on 11/02/2015 - 16:00

        That companies variable rate is lower, so the comp rate assumes 3 years on fixed and 22 years on variable. It was designed to help consumers but it is more confusing.

      • Coley on 11/02/2015 - 16:57

        Exactly why relying on comparison rates for variable loans is dangerous, and using them for fixed loans near incompetent!

        Be careful!

  • Muscles on 11/02/2015 - 11:09

    There are better fixed rates for non majors at this point in time.
    Yiu would be silly to fix right now

  • SirFlibbled on 11/02/2015 - 11:12
    -1

    St George's comparison rate for 5 years fixed is 5.58%, ME's is 5.06% even though their fixed rate is higher.

    You can probably get even cheaper if you shop around. One thing I learnt when shopping around is rates isn't everything, you need to consider their fees, 'clubs' etc and work out which works best for you.

    • Coley on 11/02/2015 - 11:23
      +3

      A good example of why comparison rates are useless. The comparison rate that banks are required to show uses a loan value much smaller then the average homeloan. If you have a homeloan this small, good for you, however the majority of people will have significantly higher.

      Just using simple math, a low value home loan will generally have a worse comparison rate with a "highfee low rate" type loan rather then a "low fee high rate" loan.

      On larger homeloans, the fixed annual fee can be far outweighed by the lower rates. Therefore when you actually work out the interest being paid over the course of the loan, the loan with the higher advertised comparison rate can actually be much better off for YOUR loan scenario. Once again, people should use the online tools available to work out a comparison rates based on YOUR loan scenario.

  • Geekomatic on 11/02/2015 - 12:02

    This'll sound really stupid- but this is a home loan— that must be paid back in 5 years? Who does that? People who have so much money they don't really need the loan? Or, do you refinance the balance after 5?? Wha??

    PS: never bought property in AU so no idea…

    • bargainshunter on 11/02/2015 - 12:05
      +1

      It reverts back to standard variable rate after the fixed term.

      • Russ on 11/02/2015 - 12:23

        Only if you stay with that lender, and they'd love you to do that.

        Once your fixed term is up, your "contract" with that lender expires. You can accept what they are willing to give you after that, or you can re-finance, or you can bargain a lower rate with your existing lender. The default option that the lenders offer, and they want you to take, is variable rate with them.

        You don't have to accept that offer, you should compare and see if they are still offering a good rate. You can also decide whether you want to fix your loan for another period, or go onto variable rate - either with your existing lender, or with a different lender.

        Keep in mind that it's not always worthwhile to change. A 0.1% better rate on a 150k loan will only save you $12.50 a month. Considering how expensive it is to change loans (both time and money), I wouldn't change loans for less than 0.5%.

        • bargainshunter on 11/02/2015 - 12:44
          +1

          Agreed, but of course it also depends on the loan amount and number of properties.

          You have to pay for mortgage discharge fee per property. So make sure you know the switching cost, which isn't listed as part of the original post.

          And it's a hassle to change your direct debits.

        • shadowarrior on 11/02/2015 - 12:46

          @bargainshunter:
          And if you were using offset accounts with your income coming in, then that's another (even though simple) step to now redirect all income to the new offset account.

        • bargainshunter on 11/02/2015 - 12:47
          +1

          @shadowarrior:

          Thanks for pointing that out :)

          Probably another thing worth mentioning is offset account does not work with the portion of the loan that is fixed.

        • Russ on 11/02/2015 - 12:53

          @bargainshunter:

          And it's a hassle to change your direct debits.

          Less than you might think. All banks are now required to participate in a scheme started by the previous (Labor) government, and I recently used this.

          You go to the bank that you want to have the direct debits switched to.

          You ask them for a "switch form" (you may have to explain this, I found the tellers at my bank were unfamiliar with them).

          On the form, you fill out the details of the new bank account you want your DDs switched to, and the account details at the old bank account, which will be closed. You also have to provide a blank, signed withdrawal slip from the old bank (or a couple of slips if you are closing more than one account at the old bank).

          The old bank will close your accounts, transfer your remaining balance to the new bank, and notify your direct debtors of the new bank account details.

          Note that if you have a DD which was started more than ~3 years ago, it won't be transferred, because the banks weren't required to keep the documentation before then. However, I have found that the debtors are really quick at letting you know that they couldn't get their money, and will post you paperwork to correct the problem.

          Or you could simply keep your direct debits in a separate account, which doesn't change with the home loan.

        • bargainshunter on 11/02/2015 - 13:02

          @Russ:

          Know about that one, but I am not sure if it works with the credit cards though. Also some firms just take forever to switch their direct debit across…

        • Russ on 11/02/2015 - 13:08

          @bargainshunter:

          Ask your bank, I discovered that my bank has a "switch team" specifically for such enquiries.

        • shadowarrior on 11/02/2015 - 13:08

          @bargainshunter:
          Yep correct and most banks don't encourage early repayment or extra payments towards a fixed loan. Not an ideal solution if you want to sell your house or put the tax returns towards your mortgage.

  • [Deactivated] on 11/02/2015 - 13:45
    +1

    To fix in a rate means you are hedging against the hordes of economists/financial experts/actuaries that the banks employ…is that a wise idea?

    Fixed rates are good for those who want stability for the term of their agreement. This is not for everyone. Do your own research.

    • shadowarrior on 11/02/2015 - 14:08

      ^This. It's your money. You do the research and then use the bank and various independent economist's prediction as advice before deciding what you want to do. Just because there's a '1% sale on interest rate Saturday Only!' Doesn't mean you go sign up with a bank's product blindly.

  • thydzik on 11/02/2015 - 14:16

    in my experience, I would never fix my rate in this economic climate. seen too many people get burnt.

    better to have the flexibility of variable which allows you to renegotiate or switch at any time.

    • bargainshunter on 11/02/2015 - 14:20

      Once you fixed for 5 years, you can't switch within that time if you see a better rate somewhere (or even with the same bank) without paying a heavy exit fee.

      • thydzik on 11/02/2015 - 14:22

        yes, that is why I am saying not to fix…

    • Mike_Mav on 11/02/2015 - 14:37

      The choice to fix is obviously a personal decision, and some like to take the stress away from rate rises. I still remember paying 9.00% variable rate pre-GFC and I'm sure a lot of people got burnt who were on variable rates back then. Remember as soon as the market sentiment thinks rates are going up, it's way too late to fix.

      You've also got to look at the USA, even when their cash rate was 0.00% it didn't mean you could borrow at 0.00%. Who knows what the floor is, but there is a minmum cost of capital the credit market is willing to lend out. Is it 4.49%? Who knows for sure, but what we do know is that this has to be close to a historical low, especially when this is a 5 year rate.

      In my opinion I like have a split loan roughly 50% fixed and 50% variable. That way you can lock an interest rate away but still get some upside if the variable rate decreases.

      • bargainshunter on 11/02/2015 - 14:42

        I also know a friend who fixed at 7% as the rate was rising and then the rate dropped to 5.5%….

        bottom line is fixing is betting the market, so there is a huge risk. Better to think of it as an insurance.

      • thydzik on 11/02/2015 - 15:00

        yes, I agree, if you want to have constant repayments over the fixed period, then it may be right for you, but you will be paying a premium.

        A split loan is even worse IMO, you are still locked in over the fixed term with the bank. but lets say the bank doesn't parse on the full rate cut, I don't think you can choose to take your variable portion to another bank.

        On my big bank's variable I have successfully negotiated decreased rates when I thought the bank's rate was uncompetitive.

        I would recommend Ubank variable at 4.54% for those with $150k+, no account fees as well.
        the $400 pa account fees with st George takes it closer to $4.75% on $150k

        Plus economists are predicting at least one more rate cut this year.

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