Hello gang,
I am going to switch my mortgage for my investment property (currently getting reamed at 4.8% with no offset).
What interest rate is your mortgage at the moment and with what lender? Or what is the best rates/deal you're aware of at the moment?
Cheers!
Bejahi is referring to negative gearing rules and is correct, an offset is not considered a redraw and therefore if you ever plan to rent out that property this needs to be considered
Ive been with them for a while 4.09,
not bad if you have low LVR
be prepared for a low home valuation though
PS Loans.com.au also has low rates, isnt a bank so dosent get that govt guarantee if it goes bust (but that probably isnt happening anyway)
As suspected I'm getting a terrible deal compared to most. Thanks so much for your comments, it's given me a good idea of what's out there, as well as some fodder if I try to renegotiate with my current bank.
Go to a broker, find the best deal, then go and see a Westpac branch manager, they are able to match any deal, to keep you as a customer. You'd best setup a current account with them first though,if not already. Most brokers dispose Westpac for matching any rate.
Also, try to get a fortnightly repayment plan, it will reduce your repayments by thousands over the years.
Loan market seems to be a well reviewed broker, http://www.productreview.com.au/p/loan-market.html
Can you confirm that the branch manager can match any rate in the market?
Yes, they have the authority to do so.
Have you noticed that every 5-star reviewer has written exactly 1 review (the Loan Market one)?
Hmm, suspicious, I'd expect nothing less from this industry :)
Reduce Home Loans 3.69%, moving from 4.07%…no annual fees, includes offset account. Non-bank lender & 80% LVR.
They do have a 3.59% option but it's extremely hard to qualify for.
Perpetual is the underwriter.
The only item I noted is that the discharge and joining fees are a bit higher than the main banks. But the overall rate is lower. This is hopefully the final lender for the mortgage…
How much is the discharge fee? I can't see it on the website.
I'm on 4.12% with State Custodians. Their advertised rate for new customers on the same loan is 3.87%. I think I'll be making a phone call to see if they can give me a better rate. If not I might look into refinancing with Reduce Home Loans.
I believe it's close to $800
We're with Ubank. Awesome rate but there's no offset account but we're OK with that. Yes there was a lot of paperwork but their customer service (via internal email or phone) has been great so far. Highly recommend. To note, this is our initial mortgage, not a transfer, and I think we got a better rate for putting down a 20% deposit.
You have been lucky, read my rant above lol!
4.59%
No offset.
Fixed for 5 years, till start 2020.
Fixed as I on my work casual and I know my repayments are set.
I was also convinced the rate was going to rise dramatically.
I know it's not the best deal.
Been to the likes of Aussie Home Loans/Smart Line and both have said to stick with this rate.
I want to change to a better deal.
The economic cost to break your fixed loan will outweigh any savings you will have from getting cheaper rate. Stick with what you have as you know what your repayments will be for the next 4 years.
That is not accurate.
It depends on their loan size and break fees, they better ask their bank and not assume it won't be worth it.
If it is around 3-4k, and if they can get a loan below 4%, given that it is almost certain that rates wont't go up anytime soon, they might be better off breaking.
My advice, ask your bank for the cost to break, sit down with a pen and paper and do the math, you will be surprised.
I am breaking off a 4.74% 3 year fixed of 520k loan with 2k break cost and will save that in less than a year.
Sure mate. I worked in the retention department of a major bank for over 18 months and never came across any scenario where eco cost was less than the savings compared to current interest rates. Only time will be if there is a couple of months left. But if it was lower in your case, then good for you.
@All Blacks NZ:
Doesn't all depend on the current rate someone is locked at and the new rate? From 4.74% to 3.88% on a 500k loan I was looking at 3k a year in savings, 6k in the 2 years left for me, eco cost was 2k!
3.92% with ING
I got 3.59% fixed for 1 year with Newcastle perm. Seen 3.49% with Illawarra credit union
That is a great rate if establishment/discharge fees were not crazy.
4.21% Citibank Mortgage Plus 100% offset with discounted Visa Infinity card. $350 package.
Not a good deal i know thats why i am looking around.
4.12% with CBA
$395 wealth package which gave me as many offset accounts as I wanted for free (got about 8 offset accounts to structure my savings systematically)
I got the $1500 refinance offer from a few months back
Break costs of around $2100 and other bs admin fees of about $400 to exit the loan
Going from 4.99% to 4.12% and factoring in the reinfnace offer of $1500 all the fees associated and the savings in interest for the remaining 6 months of the fixed term, and I came out ahead by about $800 not including tax deductions due to investment property.
Don't be lazy, shop around. It's annoying but people would jump at the chance to save $1000 in every other aspect of life, but for homeloans for some reason (probably due to lack of awareness/understanding), most people tend to just sit with the same bank for over a decade which can cost them $1000's. Go to a savvy broker, let them do all the work and you just sign and return a bunch of forms.
With CBA as well, went to a broker prior, CBA matched the rate and 2 years off the wealth package as well. I was with NAB previous but the guy just laughed at me on the phone saying you're dreaming when I mentioned what I was quoted from CBA. Stuff 'em.
3.84% variable with UBank. No fees at all, no offset but I can redraw fee free. Customers who signed up a little later got 3.79%, but I can't complain about my rate.
UBank's online signup facility was a little fiddly, but I got my refinance done within a month.
In today's ultra low interest rate environment, if your rate starts with a "4", you're likely paying too much.
I signed up in 2013 and am on 3.74%. I have phoned them twice asking them to give me the lower rate published on their website and both times they reviewed it and then put me on the lower rate. Worth trying. Both times I just said that I'd like the lower rate or I'm going somewhere else cheaper.
I'm on 3.97% - another .20% off with the remaining loan wont make much of a difference, but a discount IS a discount!
Thanks for this idea, I'm contacting them tomorrow :)
3.92% with ING + 1% cashback on repayment amount from ING + 1.5% cashback on repayment amount from broker. Also, no annual fee since it's the first year. I also BT a sizeable amount from my CC onto my offset (also have my savings there) with 0% BT and 0 annual fee so my comparison rate is about 2.7% now.
Hi Neil, that sounds pretty awesome. Can you expand on the process, while dumbing it down a little.
ING has a promo where they pay 1% of repayments as cashback every month. E.g. You pay $2000 of principal and interest in repayments per month, you get $20 back. It may not seem like a lot but that's $240 a year which covers the annual fee of $199. Granted, this promo will expire in August I believe.
When signing up for my mortgage, I did it through a broker called MatesRates. If you go through them, they will pass on part of the commission income they receive from ING to you. This equates to about 1.5% of monthly repayments.
In addition to this, I applied for a credit card and on application balance transferred the whole amount (~25k) to another card that I have which was already fully paid off. I then took this money and moved it into my offset account. Essentially, I have an interest free loan of AUD25k.
All my salary goes directly into my offset account (which is also my transaction account), and all bills are paid on credit cards which are then direct debited from my offset account on payment date. This means that I take get an additional 55 days interest free period.
I keep track of all my finances in a spreadsheet and it tells me that my effective interest rate is about 2.7% at the moment (Mainly because I have a large amount of savings in my offset account).
Fantastic, cheers
I am currently awaiting formal approval for a home loan with ING and haven't heard about the cash back offer. I've searched for info on the offer but can't find anything can you point me in the right direction?
@z00m:
I recently received the following email from them:
Customer feedback tells us that our easy-to-use mobile banking app, low fees, ATM refunds and our 24/7 customer care service are highly valued. For example, in 2015 we refunded over $10m in ATM fees to our eligible customers so we can offer them ATM access for free. However, to ensure we can continue to provide these benefits in a sustainable way, we need to focus on the ones you value the most.
The good news is that our low fees, ATM refunds, Pay Wave cash-back and 24/7 customer care service, will continue as usual. The not-so-good news, and we wanted to give you as much notice as possible, is that we'll soon be discontinuing the rebate rewards for ING DIRECT Home Loan customers. The final rebate is due on 1 August 2016.
Currently NAB, variable 4.28%, 100% offset, investment.
Switching to CBA next week. Variable 4.22%. $1250 cash back, $395 first year fee waived.
4.19% 2 year fixed
4.29% 3 year fixed
Planning to redraw.
Went with CBA instead of BoM.
BoM
$395 fee p.a
Variable 4.45%, $1500 cash back
3.75% 2 year fixed
3.85% 3 year fixed
With an investment, would you not want to have a loan with offset instead of redraw?
The offset can be used to park money till you need to use it. Whereas redraw in an investment loan has tax implications.
Investment? What's the discount are you getting from CBA?
Yes, wherever you redraw the ATO considers that the money was never withdrawn when it comes to tax
is 4.32% any good
Depends on what are the frills? No frills can be cheaper.
Also if it's investment vs owner. Principal and interest or interest only
its an investment, and its interest only.
I've only got 4.42% investment interest only with offset nab. I couldve shaved more off but wanted offset. If your 4.32 has offset I think it's quite good. Which lender?
@Skimpywallet:
yeh its an offset, i did it in box hill commonwealth bank. the chinese bankers give good rates
Switching to this;
Premium Plus Package
Premium Plus Package Discount##
3.74
%
P.A.
Comparison rate
4.10
%*
P.A.
$0 application fee for Personal and Car Loans
Discounts and benefits available on other products
$0 annual Value+ Credit Card Fee
100% Offset Facility
mozo home lender of the year 2016
3.86% Variable Rate for Owner Occupied with 100% offset
3.99% 3y Fixed Term for Investment Loan
$10/month for each loan.
Both with BOQ
Westpac has a 3.75% variable rate (2 years) which is quite good
No ongoing fees either. I've just been pre-approved with them for this deal (sub $500k).
That is great rate, will talk to the bank then. Btw, what happens after 2 years?
I looked at this. The rate will rise after 2 years. I guess you can always refinance when that happens. I didn't like this deal as there is no offset and redraw has $25 per redraw. That killed it for me.
Can see there are so many different rates. But it's hard to compare apples with apples. Because these are what I see are factors that effect rate.
1. Owner occupier (lower) vs investment (higher).
2. Size of loan (larger generally better rate), however larger is harder to find small lender to lend to you. So you have less available lenders to compete against each other.
3. Principal and interest (lower) OR interest only (higher). This one is dependent on the answer on point 1 and your reason.
4. Loan serviceability. Higher income vs lower income. Stable income vs sole trader/variable income.
5. Occupation. Healthcare workers seem to get better rates. Maybe lenders consider them less likely to be made redundant during recessions.
6. Fees. Low rate may have more fees so comparison rate may end up being equal. Lenders are sneaky and add higher exit fees to compensate their cheaper rate
7. Free redraw (lower rate) is not the same as offset (higher rate). You need to consider tax implications for investment loan.
8. Stability of lender. Small lenders may have to sell their loan book in tough times. Small lenders increase their rates if their return on investment is low (refer to point 9)
9. Good rate now does not mean good rate forever. All lenders take turns in having a "sale". But when interest rates change, some change more and some change less.
10. Fee free credit cards with rewards (frill), cashbacks or waived fees.
11. When using a broker, does not hurt to ask another broker. Brokers rely on commissions and refinance fees. So they would rather you refinance than to renegotiate your rate. Also brokers are looking getting bulk discounts, eg if they achieve 20 mil loan book in a month, they get a different fee and different rate for you. So they push hard with one lender but they may not consider if the product is right for you.
12. There are brokers that offer cashback on their refinancing commission. Do not let your guard down, ensure the product is right and broker is professional. I would avoid this for new loans and save for refinancing only to avoid stress.
Certainly not an exclusive list please let me know other factors I missed. Would love to hear other opinions. This is only my experience with lenders and brokers. Personally been burnt by point 2, 4 and 7. Some brokers are good but most are crap.
Tldr: Don't get caught up on lowest rate. Make sure product is right in the first rate.
3.74% variable with Ubank, owner occupied
lack of offset doesn't bother me at all, redraw works exactly the same for me (I know it's not the same, but for me it achieves the same goal of paying less interest for any extra repayments)
I couldn't be happier
Cool.
How long did it take to move to UBank?
didn't move, was a new loan… about a month from memory, the process was no different from when I was buying my first home and went with one of the big 4
Thanks
Can I ask if u mean to get formal approval? 4 weeks?
Offset is only good if you dump large sums of cash in regularly (or plan to store an existing large sum of cash in there).
That's right. Offset is best for investment to avoid tax implications. First broker I had didn't understand this and screwed my first investment.
Looks like I should shop around as well…
I am currently on 3.99% OO CBA with as many offsets for free, annual Wealth package $395 with rewards.
How's loan.com.au? Anyone with them to share experience?
UBank seems best option if offset is not your need 3.74 is very good rate currently..
Please advise guys if I should refinance?
Thanks in advance.
Is a ~ 130k owner occupied home loan at 4.28% any good?
Not bad really. They won't give you much of a deal for 130k
Remember 4.28% vs say 4.00% is only like $10 per week. Not really going to hurt you too badly
Thank you kindly. You have a good point actually. Not worth it :)
Lucky I got a small loan. Looking forward to paying it off!
Jelly kingdom is right. When you factor in switching fees. It's not worth it unless it's a big difference. Congrats on getting it to $130k.
4% cba full package with offset
Investment or Owner Occupier? What about fees?
OO and standard annual package fee $375 or something
Ta
~3.9 with loans.com.au. PPOR <$300k loan. Have been good to deal with.
includes offset too. i think it's lower now for new customers (Around 3.7-3.8)
3.73 with clickloans
No love for West bank
3.94%, owner occupied, interest only + 100% offset, 450k loan, ING.
Been offered 3.94 from CBA as was looking to refinance for a Reno.
Currently at 3.99 from BOQ after requesting rate review.
3.94% with CBA.
100% offset.
Fee free Diamond Rewards Mastercard/Amex
They paid me $1200 to switch from Bankwest (the $1200 covers the switching cost).
The CBA mortgage has an annual fee of $395, but no other fees.
isnt it Bankwest is their sister company?
Yes
CBA own Bankwest.
But Bankwest couldn't match the rate
4.00% variable with NAB, owner occupied, 100% offset, no annual fees, 2x platinum credit cards (me and the wife), an another free balance transfer card
Loan is down at $300k, but the initial loan (while i was selling the other house) was for about $800k, hence why I could get such a good deal
Is this the 100% offset choice package? How did you get no annual fees? I was offered first 2 years for free on the package but all unofficial (as in the contract specifies the $400 or so annual fee and the branch simply credits this the first 2 years)?
3.74% fixed for 2 years with Commbank, owner-occupied.
Westpac are offering this:
http://www.westpac.com.au/personal-banking/home-loans/variab…
3.75% variable to new home loans. Need 20% LVR though.
Fees would be standard for a big 4 bank though.
You can get a lower rate fixed from some of the majors (edit: I mean slightly lower like a couple of basis points) or their second tier brands but why lock yourself out of the next interest rate cut?
I'm currently getting 3.95% Variable with offset and all the other trimmings with free credit card etc. Had to fight hard for that one though. Have a huge mortgage too.
I agree the UBank deal is a great one if you don't need any loan features, I'd consider switching myself somewhere down the line.
We have a really shitty cba variable rate (4.45%). Can we negotiate for a new rate? Seems unfair that everyone in this thread has a lower rate, but we have reasons for not wanting to switch bank at this stage. I'll try and contact our broker for advise this coming week, but would be interesting to hear how these things work.
did you get the loan directly through cba or the broker? if this is a brokered organised mortgage, there is little chance to get a discount. if it isn't, talk to the bank and ask them for better.
when they have your money, why would they want to reduce the amount of money they make off of you
Through broker. Yes I agree, but at the same time my only other option is to leave for a different bank (which I assume is not what they want either). But yeah, your comment is pretty much what I was thinking too unfortunately.
just go to your local cba branch, talk to them and say they you want to refi unless they give you a better deal
good luck
That is a very high rate in a very low market mate.
It depends on how strong your reasons why you don't want to switch banks are, but at least ask them for a lower rate. I would ask for 3.9% ( that's bot low they do offer it to some customers) and go from there. If you can, consider leaving.
i just moved to cba and am on 3.9% with Premium Package (free offset and credit card) and had the package fee waived for the first year.
if you go in saying another big4 bank will give you X, I'm sure they'll beat it.
Owner or investment? Do you mind saying how big your loan was?
Owner occupier, between 250-500k.
I also got the $1500 bonus (https://www.ozbargain.com.au/node/233780), and 80,000 Award points (https://www.ozbargain.com.au/node/251631)
I <3 OzBargain!
split-fixed 3.69% and variable 3.99% (offset and redraw) with Newcastle Permanent. Pretty sure we got $2000 for switching
Lowest investment rate so far after reading most replies. I believe this rate is same for both OO and Investment. Source: https://www.newcastlepermanent.com.au/tools-and-services/int…
Did you get the switching bonus from Newcastle Permanent or from a broker?
Dealt directly with the local NP branch, I have never had any luck with brokers.
The $2000 ended at Christmas, it was $1000 last time I looked. I'd still swtich though, as the savings have been great and I like it that they pump a bit of money back into local community groups and sporting clubs.
3.88% variable rate ING Orange Advantage offset home loan, $800k+ borrowed for owner occupier purchase. 80% LVR
Can directly transfer or BPAY out of the offset account using the ING mobile app, no issues at all so far. Would recommend ING.
Also getting $30 monthly cashback (1% of monthly payments up to 3k into the account)
BankWest a few months ago. 3 year fixed 4.09 with 40% offset, Variable 4.34 with 100% offset later reduced to 4.14 in the last rate cut. There's a $395 (I think) annual fee which is a bit exorbitant.
Commonwealth had a slightly better deal at the time of 3.99% fixed but I had a lot of trouble getting the loan (was at 10% LVR with a contract job and very small sole trading business so didn't have an accountant). I went with BW because they were my bank and it made the entire process a little easier and got me the home I wanted.
In a few years when it's up for renegotiation we'll see what happens. I'm definitely pouring a lot into it. The most important thing is that every dollar you put in that first year is an extra $2 saved over the life of the loan due to the compounding interest. It makes a huge difference. If you pay double your loan just for the first year, for one year, you HALVE the lifetime of your loan from the savings (i.e. from 30 years to 15 years). Pay double the loan in the second year as well and it reduces to 10 years. After that it's diminishing returns.
4.22% variable rate with loans.com.au $196k borrowed for owner occupier purchase. 80% LVR offset account, no annual fee.
4.02% was the rate when I first got the loan it then went up to 4.27% after a month, then up to 4.47% the next month but just went down too 4.22%
Currently looking to move to their 3.67% 3 year fixed no fee deal they have advertised on facebook atm as I don't really get much benefit from a offset account.
Sub 500k loan with NAB @4.10% with full offest…no other fees and charges.
There will be a $395 per year fee with this package. If not, please tell me how you did that, because I'm negotiating the same deal at present!
Fees were waived as we got it as an employee account.
What do you mean?