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ANZ Fixed Home Loan - 3.75% Fixed Interest Rate for 2 Years (New and Existing ANZ Breakfree Customers) @ ANZ

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ANZ Fixed Home Loan - 3.75% Fixed Interest Rate for 2 Years (New and Existing ANZ Breakfree Customers) @ ANZ
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MarsTitan on 10/09/2018 - 10:16 anz.com.au (1456 clicks)
Last edited 10/09/2018 - 11:34 by 1 other user

As recently the big four have increased the home loan interest rate for the peasants, I did some hunting to find a better deal and avoid some uncertainty in the financial markets. ANZ just before their rate increase started a promotion of 2 years fixed interest rate for 3.75% for breakfree customers.

It might suit some people but there are certain conditions like no offset account, no redraw and not able to pay more than 5K per year as extra payment (without incurring a fee) and minimum loan of 150K. P&I only. Yearly fee of around $395 also applies.

Get some professional advice from your financial advisor if this product is right for you.

credit to roxelion https://www.ozbargain.com.au/comment/6348233/redir for pointing this out.

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closed Comments

  • brongz on 10/09/2018 - 10:25
    +1

    Yearly fee that much?

    • justtoreply on 10/09/2018 - 10:46
      +12

      Typical cost as per other banks. Usually you sign up to a package and it gives you an extra 0.1% over variable and an offset account.

      Not including an offset account here is crap.

    • MarsTitan on 10/09/2018 - 10:47

      You can get a ANZ black card for free and that card is ridiculously expensive.

      But yeah they are sort of high.

      • D3NI3D on 10/09/2018 - 14:06

        Is it free every year as long as you have the home loan with ANZ?

        • Soluble on 10/09/2018 - 14:24

          As long as you pay the package fee.

        • MarsTitan on 10/09/2018 - 15:33

          yes, but they still charge you around $60 for QFF account management fee or something.

  • jv on 10/09/2018 - 10:26
    +34

    no offset account, no redraw and not able to pay more than 5K per year as extra payment (without incurring a fee)

    that's ridiculous…

    • BensonP on 10/09/2018 - 10:29
      +11

      IIRC, besides the 5k extra payment (usually $10,000), aren't these the standard conditions for a fixed home loan?

    • roxelion on 10/09/2018 - 10:39
      +17

      usually the offset account is to help pay off the principal off faster. This can also be done by changing from monthly to weekly mortgage payments as the monthly payments are calculated per 4 weeks but each month has more than that.

      both weekly mortgage repayments and fortnightly repayments are better than monthly repayments. In fact, since interest is calculated daily, the more frequent payments you make, the more you could save in interest over the life of your loan.

      Say you’re making monthly principal & interest repayments of $1,921 on a $350,000 loan, with an interest rate of 5.20% per annum.

      If you continue to make monthly repayments, it will take you 30 years and cost you a total of $691,878. That’s the principle amount you have to pay back, plus all the added interest charges.

      By changing from monthly to fortnightly principal & interest repayments—effectively meaning an extra payment of $1,921 a year—you’ll pay off your loan four years and 11 months earlier and save $66,959 in interest charges.

      • jsb on 10/09/2018 - 12:27
        +3

        Weekly and fortnightly payments are good if you don't have offset account.

      • EnALup on 10/09/2018 - 16:01
        +1

        Didnt realise that. My broker also told me that it is personal preference to pay weekly or monthly along with additional payments as at the end it comes out almost similar.

        I was also told that the interest is calculated on daily basis.

      • Mikeologos on 10/09/2018 - 17:03

        Keep in mind that these extra repayments do count towards the $5K limit per year. In addition, the extra interest savings are less to do with the fact that you are getting the funds into the HL quicker, but rather the fact that Weekly/FN repayments sneak another 4/2 repayments per calendar year.

        The Big 4 no longer use the Monthly RMRA / 4 for weekly or / 2 for Fortnightly. These rather annualise the monthly figure by multiplying it by 12 and then dividing it down by 52 or 26 for weekly or fortnightly respectively.

        So while you can just take the monthly minimum repayment and divide it by 2 or 4, keep in mind that this is an elected direct debit over and above the weekly/fortnightly minimum amount.

        E.g. $1000 monthly repayment is actually $231 per week. Which means a $250 per week direct debit will contribute $19 per week to your maximum extra repayment threshold. This totals to $988. See: $1000 x 12 = $12000 while $231 x 52 = $12012

        Not knocking paying extra on the loan, just letting you know that the minimum repayment isn't really reflective of this system anymore for the Big 4.

        • roxelion on 10/09/2018 - 18:14

          information is both from the anz and canstar sites… canstar is dates january 2017 so i doubt much change

        • Mikeologos on 10/09/2018 - 21:03
          +1

          @roxelion: Definitely out of date. Heaps of change in banking sphere in nearly two years. Big 4 aren't forcing people into a higher repayment for weekly/fortnightly. You can still pay higher. But all have moved to the X 12 / 12 or 26 system.

      • OzFrugie on 11/09/2018 - 18:35

        If it is interest only loan, does it matter if the interest repayment is monthly or weekly/fortnightly?

    • sistermay on 10/09/2018 - 12:55
      +10

      If you do have savings it probably is better to have offset account and take up the package because the package gives you discount on standard variable rate anyway. The good thing about offset account is FLEXIBILITY.
      Your savings are not tied up and while it is sitting in your offset account it actually reduce your amount of principal (which interest is calculated on daily) and you have the freedom to use the money anytime to buy shares, house reno, holiday or whatever you like.
      e.g Offset account saving $80000, your home loan $380,000, you are in fact paying interest on $380k - $80k = $300K at the discounted variable rate due to you in the "breakfree package". If you have your salary goes into your offset account and use your credit card for majority of your expenses and pay the card off every month, you are in fact saving even more interest in the long term.
      You also don't have the restrictions on lump sum repayments either. So think carefully if "fixed rate" (more restrictive) is really good for you before you jump.

      • lysp on 10/09/2018 - 14:14
        +3

        Also it's worth mentioning (stating obvious for those who arent sure) that the tax treatment of an offset is better too.

        Where taking money from an offset is simply moving money.

        Taking money out of redraw is classed as a new loan, which means mixing private and investment (tax deductible) money from a redraw account gets "contaminated" and is messed up in a tax sense.

    • ely on 10/09/2018 - 14:57

      That's… normal for fixed in all aspects. It's the trade off that you make for knowing what the rates will be. May or make not make sense depending on your financial situation, but you'd generally deal with that by splitting and having a portion on variable that you can do all of those things with.

  • Scab on 10/09/2018 - 10:33
    +37

    Get some professional advice from your financial advisor

    Also known as Ozbargain forums.

    • Homr on 10/09/2018 - 13:30
      +4

      They also provide lifestyle and relationship advice too :D

      • Scab on 10/09/2018 - 13:32
        +2

        No, I think that's Talk With a Mod.

        • Homr on 10/09/2018 - 13:32
          +1

          That's therapy or rehab

  • shoelover on 10/09/2018 - 10:46
    +2

    4.92% comparison rate.. lol..

    • Coley on 10/09/2018 - 10:56
      +2

      The comparison rate should be the last thing you use to compare a 2 year fixed rate home loan.

      • shoelover on 10/09/2018 - 11:00

        well, I'm comparing it to variable/ fixed home loan altogether.

      • Snoopy113 on 10/09/2018 - 12:44
        +5

        Im sorry you got voted down when you are somewhat correct. You shouldve explained though.

        A comparison rate with a fixed rate loan includes the variable rate that they will put you onto for the next 28 years once your fixed period expires. This is why comparison rates are usually stupidly high on fixed rates. Banks almost always put people who ignore their fixed rate maturity on to a really high IR.

    • jjjjjj on 10/09/2018 - 12:38

      Should calculate the comparison rate that suits your own loan. The higher amount you borrow, the lower the comparison rate to your loan.

  • justtoreply on 10/09/2018 - 10:47
    +1

    This isn't a good deal. Principal and Interest (limited time special offer for owner occupiers only) at NAB is 3.69% p.a. No offset account on this one.

    Alternatively, you can get 3.75% rate at $395/yr fee at commbank as they are being aggressive at the moment. Except you will also get an offset account.

    Edit: sorry, I was talking variable. But fixed rates tend to be a smidge lower than variable at the moment.

    • roxelion on 10/09/2018 - 10:53
      +2

      unless you are already stuck with a certain bank. you do have to take into consideration of breaking fee's and whether or not a new bank in the current situation would grant you the mortgage… mortgage prisons have been in the news alot recently.

    • MarsTitan on 10/09/2018 - 11:05

      The main point is all the banks are going to raise the interest if US Feds keep raising the interest rate as their economy is gaining steam. They will use that as an excuse to raise our interest rates.

    • san87 on 10/09/2018 - 11:20
      +2

      How did you get 3.75% variable rate? There is only 0.60% discount with a wealth package.

      • Mikeologos on 10/09/2018 - 17:08
        +1

        0.6% is a base discount. Depending on loan particulars the discount can only go up from there. Best speak to a lender/broker.

      • dannyboi on 11/09/2018 - 07:21

        Definitely go in and negotiate a better rate. The advertised discounts are usually less than what they can offer.
        I’ve refinanced to NAB and back to CBA in the past. Each time, there has been a decent discount and cashback.

    • [Deactivated] on 10/09/2018 - 11:31
      +2

      More info on 3.75% rate please.

    • gutenmuach on 10/09/2018 - 12:36

      Pleaseee provide more info on the 3.75% rate at $395/yr fee. Thank you in advanced.

      • andyfc on 10/09/2018 - 19:15

        I'm on 3.77 with 395 annual I believe its just with the mortgage advantage package. It was very easy to get at the time. Apparently current floor w/offset is 3.72, without is 3.69 (redraw only).

        This I'd all prior to the 0.14 hike recently, so add that on. I'm going to try to get down to the 3.72 to take off some off the .14 increase.

    • BensonP on 10/09/2018 - 12:39

      I currently have 3.72% principal and interest with the $395 wealth package.

      Loan size is $780k.

      • san87 on 10/09/2018 - 12:50

        Did you package your loan (Fixed+Variable) or just Variable? Is it an extra home loan product(Only variable with introductory discount)?

        Thanks for sharing.

        • BensonP on 10/09/2018 - 12:53

          Fully standard variable with offset.

          I had a loan with CommBank already, sold that property and took out another loan with them. Not introductory.

    • proudwanderer on 10/09/2018 - 13:43
      +1

      Will be 3.9% come Oct 4

    • justtoreply on 10/09/2018 - 14:10

      @everyone

      After years of negotiating an incrementally improving rate with NAB, my partner called and with no haggling got 3.77% variable / 3.75% fixed (not sure on term) with CBA.

      I pushed a little harder and got 3.75% variable.

      So, anyone should be able to get it.

      I couldn't get NAB below 3.79% variable. Nobody should expect to hit 3.79% with NAB.

  • wrjcu on 10/09/2018 - 11:02
    +4

    If you can't remortgage then you have borrowed too much and things aren't going to be good for you in the next few years. Bank employees messed up and gave everyone too much money to line there own pockets.

    • edgar28 on 10/09/2018 - 11:31
      +1

      yes, bank's interest rates are not regulated (the gap is getting bigger from RBA rate)

      2 years' standard cycle

      1. They provide discounted rate for new borrower, you refinance to the new bank (any of them) they will increase the base rate in few months time that not worth for you to refinance until 2 years period( rate increase through the two years due to cost of borrowing, as they say).
      2. Then other banks offer new discount rate lower, you being forced to refinance (discharge fee, stamp duty etc - Bank and government earn again)

      if you can't remortgage……. you will be hit with crazy interest rate (2 years hike cycle)

    • tunzafun001 on 10/09/2018 - 11:56
      +2

      Yes, this is starting to show up. Banks only lending 70- 80% LVR making it difficult to refinance if property values decline.

    • salmon123 on 10/09/2018 - 12:35
      -1

      Bank employees messed up and gave everyone too much money

      I'm pretty sure the employees are giving themselves high-fives and pats on the back!

      • wrjcu on 10/09/2018 - 13:54

        Messed up as in screwed the customers for personal gain.

  • Abbi on 10/09/2018 - 11:38
    +1

    Anyone managed to get their $395 yearly fee waived?

    • R3XNebular on 10/09/2018 - 11:52
      +1

      Got both years waived or promised..

      • Abbi on 10/09/2018 - 12:44

        Was just wondering as I've been with them for about 5 years now, on the breakfree package, and really the $395 seems like a lot to be paying for this package. I'd like to get it removed altogether somehow as there are other places that will do no yearly fee and free redraws (UBank for example).

    • dmac80 on 10/09/2018 - 15:15

      I got mine waived but only because they screwed up a few things and took ages to get it sorted. Not sure how easy it is to get waived otherwise.

  • R3XNebular on 10/09/2018 - 11:55
    +2

    Just jumped on this. Had both year yearly fee waived. I had nab pitted against ANZ was calling both branches for deals. Also have variable 3.9.. Nab couldn't beat the rates.

    • JP1 on 10/09/2018 - 12:34
      +1

      I heard the yearly fee doesn't get waived off from my broker !!

      • fertiliser on 10/09/2018 - 12:37
        +5

        you probably need a new broker

      • sistermay on 10/09/2018 - 12:46
        +1

        Brokers are not bank employees and they don't have the authority to waive the bank fees. It is NOT a level playing field for brokers and the bank employees. Source: I used to be a mortgage broker.

    • orly on 10/09/2018 - 12:45

      Did you have to resubmit financials to get the deal (assuming that you are existing ANZ customer)?

      • MarsTitan on 10/09/2018 - 13:56
        +2

        no just a phone call

  • montorola on 10/09/2018 - 12:26
    +1

    Lol I read breakfree as breakfast and thought they're giving free breakfast with the new loan

  • JP1 on 10/09/2018 - 12:33
    +4

    NAB is not raising the standard variable home loan % which is good news for now..

  • daft009 on 10/09/2018 - 12:36

    PPOR only or IP as well?

    EDIT: ppor only i see. wonder what for IP, has anyone tried?

  • Ignig on 10/09/2018 - 12:41
    +1

    With some talking you can get this down to 3.65%, don't just accept any 'deal' a bank gives you.
    Source: Been talking with some ANZ people lately

    • Shikha966 on 10/09/2018 - 12:59

      Depends on loan size I guess. I have $3,20,000 loan balance. Asked for lower than 3.75. They didn’t buzz.

      • daft009 on 10/09/2018 - 13:04

        320k or 3.2mil?

        • R3XNebular on 10/09/2018 - 18:38

          320k…if 3.2 Mil doubt he'd be on ozbargain lol

        • drfuzzy on 10/09/2018 - 23:39
          +1

          @R3XNebular:

          Not true. Mine is $2.4m and I am here.

      • Ignig on 10/09/2018 - 16:40

        The 3.65% figure may be based more on friend prices, but saying that it's doable. My figures aren't much higher than that

  • Pizdets on 10/09/2018 - 12:58
    +6

    Currently an ANZ customer. For the love of God don't become an ANZ customer.

    • BargainShopaholic on 10/09/2018 - 13:11
      +2

      Agree. Been with ANZ for 6 years and they wouldn’t budge on interest rate nor package fee.

      So switched to CBA where they offered me 3.77% OO with 6 offsets (great for budgeting, categorising and saving if you’re a Barefoot follower like me ), and 3.99% for Investment Loan, both on variable, plus $2000 refinance cashback. Settled last week :)

      P.s. this is the best deal I can get based on my own circumstances, so YMMV :)

      • T-man on 10/09/2018 - 13:30

        my loan just settled last week with CBA, the rate is 3.72% with 6 offset accounts as well.

        Totally agree that ANZ is criminal, they keep calling me to offer their ridiculous rate. I told them that if you want to win my business, offer the best rate, they can't even beat CBA which is 3.72

        • gutenmuach on 10/09/2018 - 15:33

          Could you please share, what is the package called (3.72% with offset)?

        • T-man on 10/09/2018 - 15:58
          +1

          @gutenmuach:

          There is no package name, just visit your local branch and ask the interest rate. It varies and depends on the loan size.

        • ganymede on 10/09/2018 - 22:02

          Any reason why you need 6 offset accounts?

        • T-man on 10/09/2018 - 22:10
          +1

          @ganymede:

          For personal and kids, I opened the accounts for them and I contribute a certain amount per month to the accounts and they can take the money when they are 18. The savings will be offset to the loan better than in a saving account.

        • tunzafun001 on 11/09/2018 - 11:39
          +1

          @T-man:
          Good idea to remove any tax issues involved in opening kids accounts.

          Another way to create more accounts if the bank don't offer them is to split an offset loan into a fixed / variable component. Then you potentially have 4 accounts. 2 redraw loan accounts + 2 offset accounts for each.

          I also use this strategy to hedge my bets with fixed offset rates. If you have extra equity, borrow more to make it work.

          The perfect example, lets say you can get $600k loan (at 80% LVR), but only need $300k.

          Split the loan in 50/50 variable/ fixed for 3-5yrs. Place the extra $300k into the higher rate (normally the fixed loan - obviously needs to be a fixed offset loan), and pay interest on the lower variable. If the variable goes above the fixed, change the funds over to the offset account linked to the variable.

        • T-man on 11/09/2018 - 15:19

          @tunzafun001:

          Thanks for the heads up, the more I visit Ozbargain the more I learn. I was just wondering why the people split the loan to the fixed rate loan when they are currently having the variable loan, now I understand why. So are you able to move the fund between the fixed rate and the variable loans? I have never done that before, will try to do with my new loan.

        • tunzafun001 on 11/09/2018 - 15:47

          @T-man: You can only move the offset funds (unless you have redraw as well). But again, you need to have an offset fixed account. These are quite rare compared to the norm where you can only offset up to $5000 to $10000 per annum.

        • T-man on 11/09/2018 - 16:01

          @tunzafun001:

          Ok thank you!

      • [Deactivated] on 10/09/2018 - 15:34

        How much did you have to borrow to get 3.77%?

      • OzFrugie on 10/09/2018 - 23:27

        3.99 for ur IP, is that IO or PnI?

    • daft009 on 10/09/2018 - 13:21

      they have been great for me as I'm self employed.
      all company bank accounts are with them & all my personal banking.
      makes it very easy to get a new loan for me, be it for the business or personal.

  • kevo0711 on 10/09/2018 - 13:10
    +3

    If you have capacity/equity, borrow a bit more (bigger loan) to negotiate a better discount of your variable loan rate. After the drawndown you pack back the excess that you don't need whilst still on a bigger discount.

  • CrocDundee on 10/09/2018 - 13:14
    +1

    There are so many variables to this deal it is hard to say whether it is good or not. The only facts from the OP post is that it doesn't have an offset account (99.9% of banks don't offer offsets on fixed loans so it pretty standard) No re-draw facility is not good and being limited to a maximum 5k per year in extra repayments is poor also.

    So weighing up the overall 'deal' it doesn't look that good at all compared to my bank (Heritage Bank). But each individual has different needs and may not need the benefits that some other banks give. Would I recommend anyone go to my bank? NO WAY!! Trying to get a loan through them (and I guess most banks now days) is like trying to get blood from a stone!

    • MarsTitan on 10/09/2018 - 13:51
      +1

      I think it will suit some people who are already with ANZ breakfree package and want to fix it at a low interest rate before they start increasing the interest rate. I have not compared it against all available options.

    • tighttighttight1 on 10/09/2018 - 20:27

      Teachers Mutual Bank offers 100% offset on a fixed rate

      • CrocDundee on 10/09/2018 - 21:02

        Teachers Mutual Bank is part of the 0.01% who do lol… However, they don't have a redraw facility, which I guess doesn't really matter if you just park all the extra cash into your offset account. This has its dangers as well as most people wouldn't be able to let their money sit there without wanting to spend it.. Most times it is, "oh but we need this" or "We need that" therefore it goes much quicker than you think.

        • tighttighttight1 on 10/09/2018 - 21:22

          Good point. I can see how people can have the desire to spend especially if you do habitually hold that mindset.

          I've personally found the offset account brilliant as I am quite frugal, perhaps a bit too frugal…

        • CrocDundee on 10/09/2018 - 23:55
          +1

          @tighttighttight1:

          We must come from a very select breed of people who can allow money to sit and not touch it :) Being frugal has its benefits but you still need quality of life too.

  • Frozensage on 10/09/2018 - 13:28

    how much does it cost to go from variable to fixed for existing breakfree customers?

  • smiles on 10/09/2018 - 13:29

    Any deal on the Investment loan pls? currently with other bank and paying 3.98%…

    • frugalbat on 10/09/2018 - 14:39

      3.98% is a pretty good deal for investment loan…

      • smiles on 10/09/2018 - 14:59
        -1

        ya I know - thx..

    • junkie13 on 10/09/2018 - 15:05

      Which bank are you with for 3.98?

      • smiles on 10/09/2018 - 15:49

        sent u PM

    • ozbmm on 10/09/2018 - 21:44

      Interest only?

      • smiles on 10/09/2018 - 21:52

        P&I

  • Choc0 on 10/09/2018 - 13:41
    +6

    Split it. You'll pay the $400 fee, but it should cover both loans

    So let's say you have 500k in borrowings

    set up two loans of 250k each

    one fixed at 3.75, one variable at xxx

    get an offset for the variable loan

    park all your spare cash in that offset, you will get full offset benefits

  • philwill on 10/09/2018 - 13:55

    You could save up your peak credit for a month and slap that into your home loan. That money will remain on call and whilst its sitting in the home loan, it will be better than an offset account.

    If you want a good home loan rate at 3.65% comparison.. there is one fin tech online provider (tic toc) that offers extremely low set up, no annual fees with a real approval within 22 minutes. Yay… welcome to the the new world. And perhaps more fin techs will go this way, which will mean switching home loans at next to no cost will become the norm.

    • ely on 10/09/2018 - 15:03

      Fixed or variable though? UBank is offering 3.59% variable if you want to go for that, but this offer is fixed and so not really comparable.

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