Hi all,
Just curious to see what's everyone getting from your bank on investment & owner occupier loan?
I'm currently on BW complete package on 4.45% on investment & 4.34% on owner occupier. I'm thinking to push my bank to give me better deal with rents dropped like crazy in Perth recently. What's your thought? How much further could I push?
Also, with rate so ridiculously low now, maybe I should start fixing rate eh?
Broker here
is 500k your total loan amount for both investment and owner occupied? Also how much do you reckon your properties are worth now?
Actual amount more than 1 mil..I just use 500k as min threshold..
IF your LVR is <=80%, you should be able to get better rate than that. See naritas below.
Well 3 of my loans has LVR less than 80%, only 1 probably around 85%
Just curious to see what's everyone getting from your bank on investment & owner occupier loan?
For an owner occupier over $500K and under 80%LVR we're seeing variables offered at around 3.64%p.a. as a headline rate from non-banks and in the 3.8x%p.a. range as a headline variable rate from banks (when they pass on the rate movements that have been announced).
For investors you could probably add on about 25BPS per annum to these numbers, examples here.
Naturally, things like product features (for example, an offset account), financial strength of lender (for example, are they an ADI?) and other qualitative aspects of the loan (for example, what's the internet banking like? Do they offer branches?) will play a significant part in pricing (read: cheap is always cheap for a reason). So if you were looking for a lender similar to Bankwest (i.e. major brand, offers offset accounts, branches and card services) you'd probably need to be willing to accept rates around 3.9x%p.a. range unless you were willing to make some compromises.
Also, with rate so ridiculously low now, maybe I should start fixing rate eh?
Excellent question. Delivery rates for home loans had been rising in the year leading up to these recent cuts. A lot of commentators see bank margins on lending being squeezed. This means that despite downward pressure on the cash rate, there is upward pressure on delivery rates so that banks can return healthy profits to their stakeholders (read: shareholders, RMBS investors and depositors). Many pundits agree that short term (under 1 year) rates are unlikely to rise (perhaps even fall). Longer term, it's a hot topic of debate on which pressures will win out. 2 year and 3 year fixed rates are sub 4%p.a. (which are historic lows). So if you want budgetary certainty you are not paying a hefty price price premium for such a guarantee.
Hope this helps.
Rents dropping. Inflation dropping. Another poor budget. Election. Things are gonna get worse before they get better, I wouldn't be running to fix just yet.