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Westpac Home Loan 2-year Fixed Rate 3.88% + $0 Upfront Fees + $395 Annual Fees + Owners & Investors

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Westpac Home Loan 2-year Fixed Rate 3.88% + $0 Upfront Fees + $395 Annual Fees + Owners & Investors
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BasilJ on 25/04/2017 - 08:54 info.westpac.com.au (680 clicks)
Last edited 25/04/2017 - 18:58 by 1 other user

Westpac announced a new fixed rate 3.88%, that is available for both owner-occupiers and investors, paying principal and interest. This is under their Premier Package, and it comes with no upfront fees, and a $395 annual fee. As rates may change between application and settlement, its worth considering paying the rate-lock fee of 0.1%. Refinance cash-back of $1250 to help with refinancing cost. (edited to include cash-back)

Rate reverts to a higher rate when the two years run out, but the bank or brokers should be able to give you a better deal than the rack rates.

While a fair few deals have been in the market for fixed rates, most target owner-occupiers and borrowers with higher deposit. This particular offer is available for people who have greater than 80% LVR (but you may have to pay LMI), and available for investors. Definitely a good deal for a risk-adversed investor who wants to lock in a low rate for the next two years

Mod: OP works for RateCity. AFSL & ACL 316710

http://www.ratecity.com.au/home-loans/westpac/premier-advant…
http://www.ratecity.com.au/home-loans/westpac/premier-advant…

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  • vid_ghost on 25/04/2017 - 09:08
    +1

    $395 Annual Fees .. ew!

  • 2jzzzz on 25/04/2017 - 09:09
    +1

    4.94% Comparison Rate

    • pencilman on 27/04/2017 - 03:37

      I wonder how a 3.88% rate becomes a 4.94% comparison rate?
      Can someone enlighten me…

  • sfac on 25/04/2017 - 09:10

    what is the variable rate for Owner Occupied P&I

    • BasilJ on 25/04/2017 - 20:56

      The standard variable rate is 5.32%

      Depending on your loan size, the published discount is 0.8% to 0.9% off on a package. Between 4.42% to 4.52%.

      If you speak to the bank or a broker, they can probably get you a better discount than the published ones.

  • Scab on 25/04/2017 - 09:14

    $395 Annual Fees

    What a rip off.

    Rate reverts to a higher rate when the two years run out

    Let me guess, the annual fee never runs out?

  • spacejase on 25/04/2017 - 09:25

    Yep sorry westpac, as an existing customer I think the annual fee is a big thumbs down

    Otherwise an OK deal

  • [Deactivated] on 25/04/2017 - 09:33
    +1

    OP, what's your association?

    • BasilJ on 25/04/2017 - 17:19
      +2

      I work for a comparison website called RateCity. I manage the product data on our site, and give data insights to journalists who ask about financial products. Happy to chat with anyone wanting some general product advice.

      I also am a broker under another ACL, but I'm not here to generate leads. I can give personal advice under the NCCP if you choose to discuss your personal situations with me. Just happy to be here to give my 2-cents worth in the community.

  • aragornelessar on 25/04/2017 - 09:37

    All the loans I've looked at have an annual fee - I've only really looked at loans with offsets though. Is getting the annual fee waived a thing?

    • Scab on 25/04/2017 - 09:47
      -1

      Some don't have an annual fee, ING Direct from memory.

      • buckster on 25/04/2017 - 09:49
        +3

        ING direct do for their one that has an offset account ($199)

    • His_Holiness on 25/04/2017 - 10:30

      There are plenty of offset account loans that have no annual fee. Yellow Brick Road, Reduce and Loans.com.au immediately come to mind.

    • BasilJ on 25/04/2017 - 18:06
      +2

      Here's a list of loans with offset accounts on RateCity. One easy way to tell if there are annual fees is to look at the difference between the rate and comparison rate. If they are significantly different, then there's probably an annual fee in that calculation. If they are only a little off, its probably an upfront fee that is causing the difference. Tips of the trade :)

      [RateCity loans with offset accounts] (http://www.ratecity.com.au/home-loans/mortage-rates?h_offset…)

    • justjack on 25/04/2017 - 19:16

      Bottom line is the comparative rate. Annual fees are just an illusion

      • BasilJ on 25/04/2017 - 20:04
        +3

        Comparison Rates can be helpful when used to compare loans, but its important to understand the assumptions behind it.

        The calculation assumes that you are borrowing 150k over 25 years (legislated amount and term requirement), and includes the upfront, ongoing and end fees on the loan.

        So now, with the average loan size in Australia being about $350k, and many Sydney-siders are getting loans of over a million dollars, a loan with a higher comparison rate might actually be better for you because the difference in loan size. A different way of putting it is that if you are borrowing a lot of money, the savings you get from getting a discount on a package can outweigh the cost of the annual fees.

  • varunynr on 25/04/2017 - 09:55
    +1

    No cashback to incentivise jump from another bank for refinances ?

  • noise36 on 25/04/2017 - 11:25
    +2

    While the major banks annual fees are annoying, they do waive a lot of other fees on their packages and offer a discounted rate.

    i.e. No annual fees on credit cards, bank accounts or anything else…can work ok for some people.

  • Robin2012 on 25/04/2017 - 11:52

    good. plan to lock some

  • [Deactivated] on 25/04/2017 - 11:54
    +2

    What's the deal?

    CUA fixed rate at 3.84% for two years on owner occupied. https://www.cua.com.au/loans/home-loans/fixed-rate

    WBC rate @ 4.08% for 2 years, and becomes 3.88% with .2% discount when applying in branch and via broker. https://www.westpac.com.au/personal-banking/home-loans/fixed…

    Personally not a fan of the big 4s, they tend to jack up rates out of cycle and generally have higher rate than smaller lenders.

  • danielh on 25/04/2017 - 12:45

    Does it come with a 100% offset faciltlity?

    • ynwa on 25/04/2017 - 13:09

      No offset. You can put in up to $30k and redraw from it fee free though.

      • Ti-au on 25/04/2017 - 13:26
        +1

        Just don't use redraw for investment purposes.

      • danielh on 25/04/2017 - 14:18

        Hmmm. Not worth it for me then. I usually have about $250-$300k to offset my main loan and the rest is in other investments. The offset alone makes it a cheap draw down facility in case of emergency. It is also tax efficient for me to go this path.
        Upon reflection I do. It think that there are man (if any) fixed term loans with a 100% offset. If anyone knows of one please feel free to shout out as I'm looking to reduce my interest on my current loan with NAB. Currently 4.58%

        • Mkr on 25/04/2017 - 15:03
          +1

          4.58% ouch

        • BasilJ on 25/04/2017 - 15:29
          +2

          Hi, have you seen this product at community first cu? It's a 3.69 3-year rate.

          It comes with that 100% offset on a fixed rate that you are after.

          No annual fee or monthly fees. Perhaps this should be separate deal!

          www.communityfirst.com.au/personal/home-loans/fixed-rate

        • pencilman on 25/04/2017 - 16:44

          Looks good! Don't know much about communityfirst though.

          Should I move my loan from CBA… Hmm….

        • seijai on 25/04/2017 - 19:29
          +1

          @pencilman:

          Too bad they have $600 application fee, legal fee and valuation fees….

        • danielh on 25/04/2017 - 20:27

          @Mkr: Yep, just emailed my NAB business banker to ask for a better rate. Currently have three home loans with him between me and the wife and my sister just got another loan approved at about 4.2% but I think that was a fixed term two year one with offset. Just trying to confirm with my sister the details now.

        • Mkr on 25/04/2017 - 20:33

          @danielh:

          Hi danielh
          I was on 3.8% variable P&I with NAB (owner occ) before i switched over to bank of sydney.
          They can definately do you a better deal
          Negotiate hard and be prepared to walk

        • danielh on 25/04/2017 - 21:06

          @Mkr: Thanks. My sister apparently got 4.05% interest only loan (for 5 years) and then it reverts to a higher rate of 4.7%.

          I'm looking for a Variable loan with 100% offset (P&I). To be honest I'll probably have enough in the Offset account to pay for the whole of my main loan by the end of FY 2018 but I start to consider using that as a cheap way to buy another investment property.

          What were the details for your 3.8% loan? IE. Fixed, Variable, 100% offset or not? etc

        • Mkr on 26/04/2017 - 04:17

          @danielh:
          Variable with 100% offset

          They will take you seriously if you show them evidence of a better rate, so show them some correspondence with another bank/broker if possible.

        • danielh on 26/04/2017 - 23:56

          @Mkr: Thanks. My NAB business banker is going up the chain to see if he can get a better rate for me as apparently they "do not provide an interest discount on existing home loans".

        • Mkr on 27/04/2017 - 07:32

          @danielh:
          All part of the theatre… i will be highly surprised if he says no sorry we cant help you.
          All the best

        • danielh on 10/05/2017 - 15:17

          @Mkr: End result is 3.99 (down from 4.57) for P&I owner with NAB (ANZ also offered the same when I asked.

          Two NAB investment variable property loans got down to 4.34% (down from 5.05). ANZ offered 4.29% 12 month fixed and then variable after that.

          Now to work out what to do with the Westpac loans which are Interest only at 4.66% until November then P&I after that.

  • BasilJ on 25/04/2017 - 15:20
    +1

    Thanks for all the responses. I'm glad people are finding the deal helpful.

    As I'm also a broker (under another ACL as a credit rep), I can tell you that there is always place for the big 4. When the application process starts, and the minute policy differences sets in, the smaller lenders don't want clients in certain niches. I'm quite impressed that Westpac is offering such a sharp rate to both owners and investors, even for high LVRs.

    Comparison rate is high, because the revert rate is high. But as I mentioned in the post above, the bank and the broker can almost always give you a better rate than that. Thus, I don't see it as a true reflection of the cost you actually incur. Annual fees cost is easily covered by the savings if your loan size is big. Definitely a saving for any investors on a variable rate.

    I forgot to mention that the deal is also available for existing customers. I've seen many deals when lenders are trying to attract new money, but it's nice to see Westpac trying to do it right by their existing customers too.

    • GeorgeS on 25/04/2017 - 16:38
      +1

      As an investor, I'd be looking at this now, if I needed to roll over any loans. APRA will be imposing more changes in the near furure, so this is not to bad for 2 years.

    • pencilman on 25/04/2017 - 16:41
      +1

      Don't know why you got the neg. Here a plus from me.

    • ynwa on 25/04/2017 - 17:16

      If you've got a discount off the current variable rate with Westpac, do you keep it after the fixed term is over and revert do you know?

      • BasilJ on 25/04/2017 - 17:35
        +1

        If it's my existing customer whom I have applied for a discount for, I know that they will revert to the discount I've applied for them. Since I don't know how your loan originated, it's a little hard to say.

        My best bet is to call Westpac up and ask, as they will be able to ensure you keep your discount after the fixed term.

        • ynwa on 25/04/2017 - 17:51

          Will do cheers, much appreciated.

    • delfredo on 25/04/2017 - 17:30

      Any good deal for variable rate IP loan?

      • BasilJ on 25/04/2017 - 17:40

        IP? I'm sorry I don't know that abbreviation. I would guess it is investment or interest only?

        • ozshaz on 25/04/2017 - 19:07

          IP- investment property. I am also interested with this one. Any Investor interest only variable rate deal ? Currently with a non Big 4 with 4.49% variable 90% LVR.

        • BasilJ on 25/04/2017 - 19:43

          @ozshaz:

          If you have an owner-occupier loan, and happy to refinance that too, there are two interesting options in the market.

          • loans.com.au has an investment loan that you can package with their owner occupier loan, and get 3.64% variable. But you do need to be at 80% LVR - https://www.loans.com.au/home-loans/smart-loan-package

          • AMP Bank does a similar thing, and where Owner Occupied value is more than total investment securities, u can get the lower OO rate for your Investment. They do that for their basic package 4.05% (no annual fee) and professional package (annual fee $349 pa) 3.79% (250-750k, less than 80% LVR) or 3.96% (250-750k, 80-90%). They don't have a branch network, so its easiest through a broker, so speak to one, or PM me if you are in Sydney.

          @ozshaz and @delfredo, without knowing your loan size and circumstances, its a little hard for me to tell you what is suitable. If you go on this link to the RateCity site, its been filtered to show only investor variable rate loans from the 104 lenders that we compare. You can interact with the filter bars on the left to your loan size and property value, and the loans suitable for you will surface.

          RateCity variable investor loans

          I should probably add that RateCity doesn’t lend money or provide financial advice – just the information you need to make an informed decision. We make money by displaying advertising on our website, and we are also paid for generating leads for financial institutions and brokers.

        • BasilJ on 25/04/2017 - 19:50

          @ozshaz:

          To refinance at 90% will mean that you will need to pay LMI again. That's a cost you need to factor in if you are thinking about refinancing.

        • GundamZeta on 25/04/2017 - 22:06
          +1

          @BasilJ:

          I will stay away from loans.com.au

          did some research previously their offset is not a true offset account (saving account) which means your money in offset account may not cover by the Govt deposit guarantee in case of collapse.

        • danielh on 25/04/2017 - 22:33

          @GundamZeta: that is the same with the other non big boy ADIs. Not just Loans.com.au.

        • BasilJ on 25/04/2017 - 22:43

          @GundamZeta:

          You are right that the offset account at loans.com.au is not covered by the deposit guarantee as it is not an ADI. Along the same lines, anybody with more than $250k in their accounts (total at bank and subsidiaries) should also be wary that amounts over $250k are not covered in a collapse.

          Life is about taking risk, not unwarranted risk, but being able to understand the risk involved and the benefit you get by taking that risk . While I must say there may be finance companies you need to be wary of, loans.com.au is probably the best of the pick. Its parent company, Firstmac is Australia's largest non-bank lender, managing over 8 billion dollars in home loans. Firstmac operates mostly through the broker network, and loans.com.au is their online arm.

        • ozshaz on 26/04/2017 - 06:24
          +1

          @BasilJ: here is the list of banks/ lenders protected by govt.

          https://www.fcs.gov.au/which-adis-are-covered

        • BasilJ on 26/04/2017 - 18:58
          +1

          @GundamZeta:

          To satisfy my personal curiosity on what happens if loans.com.au collapses, I rang up my contact at loans.com.au.

          • If a lender were to fail, it is possible that the lender would be sold as a going concern to another financial institution which would continue to operate the loan and offset with no change. It is also possible that any extra money they have put in their offset redraw facility would simply be deducted from the debt they owe the lender and their net debt position would be unaffected. Because the offset is a sub-account within the loan there is no possibility of the loan being sold in full to a third party and the money in the offset being “lost”.

          There is an article about this last week. smh

          • Rather than your offset funds being snaffled then your entire loan being on-sold to a different lender Sarah, they'd more likely just be sucked into your loan"

          So if I have a 500k loan and 200k offset when my lender fails,

          • my best case scenario is that the new company that buys will operate the product as is, and I still have a 500k loan and 200k offset
          • my worse case scenario is that the new company takes the net of the two, and I have a 300k loan and no money in my offset. Inconvenient, but not the end of the world.
          • nightmare scenario where i will still have a 500k loan and my 200k disappears will not actually happen.
        • GundamZeta on 26/04/2017 - 22:55

          @BasilJ:

          Thanks for your tips..

          But i'd rather take less risk and pay abit more in interest.

          I don't rule out moving to loan.com.au, but at least not this stage.

  • BasilJ on 28/04/2017 - 16:19

    For the ANZ customers out there, ANZ has matched this rate for their Owner-occupier Package loans. 3.88% on their Advantage Package with $395 annual fees.

    • varunynr on 09/06/2017 - 03:11

      What about cash back ?

      • BasilJ on 09/06/2017 - 08:56

        No cashback at anz. Nab has since matched this, and there is a 350k rewards points.

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