I'm trying to find the best home loan deal at the moment. Around 90% LVR, 500-510k, PPOR, First home buyer in VIC metropolitan area.
Land is expected to be titled in May and construction soon after.
I think with the current upward trend it's better to go for fixed but not 100% sure. My broker recommended ANZ with 3.99% fixed rate and hefty $295 (or $395?) annual fee, but I have a feeling that it might be the best for him, not for me.
Any suggestions welcome! Thank you in advance :-)
Hey ninjawarrior
Thanks for the reply. The 90% LVR is precisely what you've said - we don't have 20% deposit. I understand 20% is much better but that's something out of horizon in a few years..
I guess my broker has to do a better job!
Speak to another broker
PM me please.
Our team took a quick look over your scenario and has put some general suggestions together for you below (NB: Definitely not credit advice/usual disclaimers apply):
Preface:
No one in a forum will be able to tell you what a good deal is without knowing the complete scenario (i.e. your credit profile/the proposed collateral/your goals for the next few years/your credit history/budget, etc). So there is a chance that if your broker was doing their job well they would've made recommendations to you that show better insight than simply offering a cheap rate or some generic offers that may not ultimately be a good fit for where you're headed and what's important to you. Furthermore, if you're looking at buying a property that is in a high density apartment block, off the plan or in a 'reduced LVR' postcode they may be recommending ANZ ahead of cheaper options elsewhere because they are a better fit for the proposed scenario.
What's going to work out cheapest?
Probably the biggest variable will be LMI. Don't get too caught up in annual fees as being a young borrower it would be extremely unusual if you had exactly the same lender and product for more than the next 3 years (at the high side). Also, contrary to what others are saying, fixed rates are typically excellent value for high LVR borrowers perhaps even more so because you are effectively locked into the lender you go with until you drop that LVR under 80% (unless you wish to pay another LMI premium to switch).
Let's take a look at (estimated max) LMI:
Assumed purchase price of $570K
90% LVR inclusive of LMI (base loan amount $501K [not pushing up to 90% specific])
NAB - $8,477
Beyond - $8,580
NPBS - $6,989
ME - $6,668
Virgin $9,708
ANZ - $9,874
90% LVR plus LMI (base loan amount $513K)
Beyond - $12,915
NPBS - $10,452
ME - $9,951
Virgin - $14,598
Some headline interest rates to note
NAB FHO 2 year fixed - 3.69% (90% incl)
Beyond 2 year - 3.94% (95% incl)
NPBS 2 year - 3.99% (95% incl)
Virgin 2 year - 3.99% (95% incl)
ANZ 2 year - 3.98% (95% incl)
Beyond 3 year - 3.94% (95% incl)
Virgin 3 year - 3.99% (95% incl)
NPBS 3 year - 4.09%
NPBS Variable - 3.84% (95% incl)
Virgin Variable - 4.04% (90% incl) - 4.29% (90-95%)
Beyond Variable - 4.30% (95% incl)
NAB Variable - 4.47% (90-95% incl) ← you could probably get some solid custom pricing that would bring it into line with the other lenders listed.
ME Variable - 4.19% (90% incl)
Hope this helps and best of luck with the journey. We hope your broker is giving you some proper guidance outside of just handing you rate :)
Thank you Naritas. Great info. Sent you a PM.
ANZ is $395/year for me, and an annual fee around that range is pretty standard for one of the big banks.
Out of all the things you've listed, the only one really restricting your choice at all is the 90% LVR - is there a reason for this aside from not having a large enough deposit saved up?
As many on these forums have said, fixing your rate is essentially you betting against the banks. They have hundreds of people whose job it is to sit there and decide how much to set fixed rates at so that they will make money, and they will have priced those fixed rates accordingly. Variable with 100% offset is almost always the best way to go, unless you're the kind of person who can't help but spend money sitting in a bank account.