Ubank has finally come to the party - after being stingy and not passing on all of the last rate drop, they are finally releasing (from 21 Sep) a new offer.
Better than loans.com.au as no valuation fee.
Ubank - Home Loan 3.99% Variable and Comparison Rate
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For a long time Commonwealth didn't have an offset for my loan with them, didn't really care as I always kept my extra money on as a redraw and pulled it out when I needed it.
main issue with this is tax implications (each redraw is considered an extension of the loan) if you ever wish to rent out your place or otherwise claim deductions against the interest. if you're sure you'll either live in it forever, or sell it when you buy another, then that works fine.
I'm not really sure you have an 'offset account' with loans.com.au —- they aren't a 'bank' regulated by APRA so they wouldn't be able to offer deposit accounts.
Put another way, if loans.com.au ever fell into trouble and they wouldn't let you transfer money from your 'offset' into your loan, would that offset fall under the 250k government guarantee?
Thanks for pointing that out. That hadn't occurred to me.
Then again if they go belly up and don't honour my deposit account, I won't honour their mortgage account. Ratio is about 7:1 in favour of mortgage :)
The cashback feature is nice.
I don't know - I've been watching home loan rates since 2009 and lenders like Ubank, HSBC and loans.com.au have always offered low rates.
ING - not so much. I know you can refinance if needed but when rates go up, I've never found ING to be as competitive.4.19% p.a. comparison rate compared to 3.99% p.a. comparison rate, how is that better?
- Offset account
- 2% cashback on pay pass
- 1% cashback on mortgage repayment
- use any ATMs in Australia
- Offset account
2% cashback on pay pass- 1% cashback on mortgage repayment
use any ATMs in Australia
two of those are available without a mortgage through them
@SBOB:
offset account is a huge + from ING.
$199 annual fee can be largely / slightly offset from 1% cash back on mortgage repayment.
I swear I have this rant every time a home loan deal comes on here and someone starts raving about the comparison rate.
For a modern day loan, the advertised comparison rate is next to useless. Not many people take out 25 year loans, and near on nobody has a $150,000 loan either.
This HEAVILY skews the results to make products with ongoing fees look terrible.So what is the actual difference between the two products???
Using the average home loan of $500k, and a 30 year repayment option the (much fairer) comparison rate is a bit closer…
uBank 3.990% vs ING 4.057% … Or a different of 0.067%So yes. At a fair comparison rate, uBank still does come out ahead. Over the life of the loan, you will save $5,771 ($199 * 29)
However, the ING product does have some nice extras that should be considered.Offset account.
Store $10,000 in here, and that will save you ~ $400 per year in interest. (or about $12k over the life of the loan!)
This alone covers (and some!) the $199 annual fee by ING, and to be honest a '$10k safety buffer' is probably a wise thing to have (I'd recommend more than that, but obviously we all spend way to much on here to do so!)and
1% Mortgage Reward (Loyalty cashback).
Loan repayments would be ~ $2.4k per month. With INGs mortgage reward bonus, this means you would receive ~$24 a month ($288 per year) cash back, just by paying your home loan off at the standard rate. This (again) alone covers the $199 annual fee by ING. It also incentives paying a little extra (say $3k per month) to save that extra 1% :)So there you go. Two fairly simple features of the ING product, should save the average buyer ~ $700… Or $500 per year after the annual fee is taken out (or $6,000 over the life of the loan)
So yea, that is how this is better.
Offset account.
Store $10,000 in here, and that will save you ~ $400 per year in interest. (or about $12k over the life of the loan!)
This alone covers (and some!) the $199 annual fee by ING, and to be honest a '$10k safety buffer' is probably a wise thing to have (I'd recommend >more than that, but obviously we all spend way to much on here to do so!)but you could store the same $10k in the uBank loan (as it has free redraws) .. So assuming you dont need to 'tax benefits' of an offset account, this isnt really a for or against as it applies to both
Wish this was for existing customers as well, last time myself and sister in law called and complained and they dropped our rate, hoping they will do again.
Terms and Condition (https://www.ubank.com.au/content/dam/ubank/documents/uhomelo…):
"Your application must be for a new UHomeLoan. Applications for limit increases/variations/change of loan purpose to existing UHomeLoans are not considered to be new UHomeLoan applications."Surely discouraging existing customers :-(
I did the same last time they dropped their rate and they applied the discount for us right away. I'll be trying this again on September 21st!
I also tried last week to get the advertised rate but they denied for existing Home loan :-(
damn mine is 4.09%
is 0.1% worth to move (to ING) or complaint?I think there are (Govt.) fees for refinancing (?)
in NSW, the refinance fee usually involves:
- your current lender discharge fee - around $350
- $214 transfer fee
- $199 annual fee from ING but waived for the first year.
your first item, i think ubank has none? not sure sounds too good.
For Variable Rate UHomeLoan there are no break costs if your UHomeLoan is paid out early.
https://www.ubank.com.au/content/dam/ubank/documents/uhomelo…
Yup. Ubank doesn't seem to have an exit fee. Best is to check in your credit contract.
So in you case it should only cost $214 transfer fee for the goverment to switch, then $199 from the 2nd year onward :)
Not to worry Ubank will be stingy with the valuation. In saying that im currently planing on leaving ubank. Customer service is appalling. not to mention they are pretty slow with everything. So if you find a property you want to move on quickly dont rely on UBank
uBank are appalling.
And only a couple weeks ago did I convince them to drop my rate from 4.17 to 4.09! Back to the drawing board…
Not quite better than loans.com.au when you take into account that loans.com.au offers an 100% offset account and they also accept self employed. Makes a big difference for me.
- What's rate that uBank uses when accessing the serviceability?
- How's the rate in (1) compared to other tier-2 banks?
Guys, I am sort of new to this and getting utterly confused here:
Let's say my loan is 300K and I need an offset account with unlimited withdraw and extra repayments. How does it compare across Loans.com.au/uBank/ING? I also get a feeling that loans.com.au passes on the RBA's rate quicker than the other two.
Can someone please make a breakdown?
For starters i don't think ubank offer an offset account. So it's a must then you can rule them out.
I'm in the process of moving from nab to loans.com.au. Pretty painless so far.
Loans.com.au has no annual fee and a better variable rate compared to ing.
Both don't have physical branches so much of a muchness there.If it was me, and done a lot of research into this, i'd go loans.com.au but… if you wanna go with a more 'well-known' brand then go ing.
not sure if non-bank is secure as banks? also, this loans.com.au how much is the rate for investment property?
Offset is nice but in my opinion, it shouldn't be a deal breaker.
Before Commonwealth offered an offset account as part of their wealth package, I just kept my extra cash on my home loan as a redraw so it would have the same effect as an offset. You can do the same with Ubank.
Needing to switch my current loan (with homeside) to interest only as we will be renting our place out in the coming months. Any suggestions? Many of these offers don't allow interest only or investment properties at the advertised rate. Cheers
Offset is coming to ubank in the future, under development now.
Search for offset in ubankideas.com.au for the updates.
They said that ~4 years ago when I joined… Goodluck with that.
UBank is a joke… they are really unprofessional mob of customer service officers sitting somewhere overseas; who are not allowed refinancing existing NAB loans (any guesses why?) even if it is a $380k loan to an owner earning $118k pa (with $450k+ equity in the property and only one mortgage… Think will have to dump NAB… and worst still they mess around with you for three months changing goal posts for what documentation is required for formal loan approval before you are fed up with them.
Worth mentioning that the same house was acquired at a much higher interest rate with a lot lower salary with an LVR of about 85-90% several years ago.
so much for their "More give, less take" rhetoric! Admit it if you want a bigger slice of the pie… Don't be hypocrites…
UBank call centre is Australian based..: https://www.ubank.com.au/about-ubank
"Should you ever need help or support, you can contact our Australian-based call centre."I refinanced to UBank from NAB..
Has anyone tried to call them up to get the new discount rate?
I received this response after asking for a customer service representative to call me regarding a rate reduction:
I can confirm that if a discount has already been provided to you, we are unable to provide an even further discount to your loan.
Therefore we are unable to provide the 3.99% p.a., this promotion is available only to new loans that are being submitted during the promotional period. Please note that your current discount is set for the life of your loan, and we’ll also endeavour to keep the standard variable rate low as well going forward.
We thank you for your understanding.
Kind regards,
James K
Advisor, Customer Service
UBank – A good place for moneyI then replied:
James. I don't accept your response. You are able to provide a further discount. I don't agree with the fact that you offer better rates to new customers, instead of also passing reductions through to your 'valued' existing customers. Please give a me a call.
Excellent deal given no fees.
Loans.com.au is 4.02%, 4.04% comparison after fees in comparison.
I recently switched to loans.com.au as I really wanted offset, and at the time they were only 4.02% with offset.