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Homestar Finance: Own. Occ. Loan - 2.74% (P&I) | Investor - 3.14% (P&I)

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Homestar Finance: Own. Occ. Loan - 2.74% (P&I) | Investor - 3.14% (P&I)
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whyisave on 01/10/2019 - 16:10 homestarfinance.com.au (1594 clicks)
Last edited 01/10/2019 - 16:33 by 1 other user

The RBA has cut the cash rate by 0.25% to a record low of 0.75% (Tuesday, 01 OCT 2019).

So, the home loan market is heating up, with various companies fighting for your debt.
Some are passing a bigger cut to you, some aren't.

I just stumbled upon Homestar Finance and thought I would share with OzB community.

— Official Press Release (PDF)

PRESS RELEASE
FOR IMMEDIATE RELEASE
1 October 2019

HOMESTAR FINANCE IS PASSING ON THE THIRD RBA RATE CUT IN FULL

Following RBA’s announcement today to reduce the cash rate to a historic low of
0.75%, Homestar Finance will be passing on the full rate reduction to our customers.
Customers on our standard variable home loan rates will enjoy a further rate cut of
0.25% per annum, on top of the 0.50% reductions already passed on this year.
“As one of the oldest online lenders in Australia, we are continuing our commitment
to helping Australians achieve their dream of home ownership sooner and providing
a competitive edge amongst our peers” said Andrew Chepul, CEO of Homestar
Finance.

“Passing on all 3 rate cuts in full, shortly after each RBA announcement is only
one way we continue to demonstrate our commitment to our customers. While
borrowers have seen lenders talking about a “3” in front of their rate, we have been
providing customers with a rate starting with “2” since the July RBA rate cut” added
Mandy Sly, GM of Homestar Finance.

The rate reductions will be effective from 28 October 2019 for existing customers
and are effective immediately for new enquiries.

Financial Banking Debt Home Loan HomeStar House Investor Loan Property Real Estate

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closed Comments

  • apra143 on 01/10/2019 - 16:16

    Have they been passing cuts to existing customers? Do they jack up rates for no apparent reasons?

    Advertised rates mean little if they maintain margins on their back book (medium-long term mortgage customers) compared to front book (loans they have recently acquired).

    • justtoreply on 01/10/2019 - 16:20
      +7

      Did you read it at all?

      • apra143 on 01/10/2019 - 18:44
        +2

        Yes, though it was later edited to include the part about the passing onto existing customers.

        Good to also see positive reviews from others.

    • SBOB on 01/10/2019 - 16:28
      +3

      Yep.ive been with them for a bit over a year and have had every rate cut passed through
      Bit slow to pass through, but they do get actioned.

      • rloone on 01/10/2019 - 16:46
        +1

        Yes. I can report the same.

        • whyisave on 01/10/2019 - 17:31

          recommend Homestar ?

        • rdhupar on 01/10/2019 - 20:34

          Me too

      • whyisave on 01/10/2019 - 17:31

        so, do you recommend Homestar?

        i'm going to switch my loan provider, of last 6+ years.
        they won't keep my business anymore,
        and so i am shopping around, and applied with TicToc but can see Homestar to be more attractive.

        ( i just wanted Offset account )

        • SBOB on 01/10/2019 - 18:19
          +2

          I've had no issues with them so far

          Used them for a refinance without issue
          I have a split loan with part IO for investment stuff and part variable with offset, all against primary residence.

          Dont have a huge mortgage left so the interest rate drops dont make a massive difference, but the fact they pass them on without question (despite a month delay for existing customers) is a positive in my books (compared to State Custodian where I came from which were useless and didnt pass on rate drops)

          • whyisave on 01/10/2019 - 18:25

            @SBOB: thank you for the quick reply.

  • dynaflow on 01/10/2019 - 16:16
    -3

    I must be missing something….how is this a bargain?

    • whyisave on 01/10/2019 - 16:17
      +2

      it's not a "bargain" per se, but a "bargain" compared to what you can find elsewhere.

      we all shop for cheaper fruits, so why not shop for cheaper debt !

      ( creating debt…what a business model,…from thousands of years ago that nobody wants to change )

      • frewer on 01/10/2019 - 17:59
        +1

        ( creating debt…what a business model,…from thousands of years ago that nobody wants to change )

        I like this comment. I cant wait for the whole thing to blow out which wont be long.

  • dynaflow on 01/10/2019 - 16:19
    +5

    I love capitalism….creating profit from debt.

    • whyisave on 01/10/2019 - 16:24
      +4

      Privatizing profits and socializing losses

    • tsunamisurfer on 01/10/2019 - 16:30

      Without the concept of credit we'd still be ploughing fields with Oxen. Take the good with the bad.

      • whyisave on 01/10/2019 - 17:40
        +2

        Even with concept of credit, people are still ploughing fields with Oxen.

        The bad doesn't have to stay bad, for centuries, just like slavery didn't stay as slavery,
        but kind of still is slavery in 2019…just in different forms.

  • alexlim2000 on 01/10/2019 - 16:29
    +6

    Does it come with fire insurance? Because TROGDOOR

    • j4ck on 01/10/2019 - 16:37

      Can you draw a dragon? I want to see your skills of an artist.

    • locknuts on 03/10/2019 - 11:59

      Oh! Homestar! Lol

  • whyisave on 01/10/2019 - 16:55
    +5

    PS: from the other thread

    if you're an existing customer of Homestar, you have to wait til the 28 October to get the rate drop. New customers don't need to wait. Athena have passed the RBA rate drop in full immediately and automatically to all of their customers. Athena don't think it's fair that loyal, existing customers have to wait to enjoy the savings.

  • mikedenoob on 01/10/2019 - 18:06
    +3

    Great was looking for a lender to refinance. Currently a sucker with Westpac for variable 3.67% own occupier p&i with offsett account $395 annual fee. Kinda feel sick thinking how much I could be saving..

  • Chivalry on 01/10/2019 - 18:18
    +8

    i had a quick look at Homestar vs Athena as an invester. And everyone should do their own research and check eligibility.
    Comparison Rate for P&I is 3.17 vs 3.2
    Comparison Rate for IO is 3.42 vs 3.24

    Some have mentioned homestar has offset account - not at the 2.74% rate mentioned above, but Athenas redraw will basically offer the same:
    Athena’s redraw breaks free from expensive and restrictive redraws that used to exist. It’s fee free and conveniently available online. It makes life easier, avoids the costs of an offset, and pays off your loan faster. Athena’s Redraw helps you pay off your home loan faster. Check this out…if the amount you owe us was $350,000, and you had $50,000 in your Redraw, we’d calculate the interest on $300,000. And that interest will be less (at 4% interest for 30 years it would be $47,000 less in fact!). So the more you add, the less you’ll pay on your loan, and the faster you get to the finish line.

    Fees for Homestar:
    Application Fee $0
    Valuation Fee $248.08
    Legal Documentation Fee $264
    Fixed Rate Lock In fee (optional) $395
    PEXA Fee $56.43
    Government Charges and Search Fees At Cost
    Verification of Identity Fee $27.50
    Monthly Account Fee $0
    Annual Account Fee $0
    Discharge Fee $535(plus third party costs)

    Fees for Athena:
    Athena application fee $0
    Athena monthly fee $0
    Athena annual fee $0
    Athena redraw fee $0
    Athena exit fee $0
    Application valuation costs $0
    Solicitor settlement costs $0
    Government refinance costs These include title registration, discharge of mortgage and title search fees and vary by state in the range of $260 - $440.

    • dasher86 on 01/10/2019 - 19:12
      +1

      The way you are talking you sound associated?

    • UrbionPT on 01/10/2019 - 19:25
      +1

      Well I don't usually give my opinion however I do find ozbarganers usually smart and rely on their opinion when I don't know much about the subject which is the case now but I am pretty sure that is a big mistake to assume that redraw = offset, offset = your money, redraw = banks money that allows you to redraw however it's their money that can stop you to redraw it whenever they like. That's a catch of "saving" 47000 over 30 years.

    • Chivalry on 01/10/2019 - 19:39
      +1

      Not associated, just looking for a good deal for myself atm.

      Agree redraw is not exactly the same. But a fee free instant redraw, with no penalties to put in more money is next best thing with the same outcome.

      • Kharn83 on 01/10/2019 - 19:50
        +6

        Just be aware for investment loans a redraw does not have the same tax deductability status as drawing monies from a offset account

        When monies are taken as a redraw it's seen as a new loan and the purpose of that loan must be clearly documented and justified as for investment purposes, whereas because an offset is never counted as paying down the original investment loan U can take money out of the offset for any reason and the loan continues to be fully interest deductible.

        • Chivalry on 01/10/2019 - 19:51
          +1

          Thanks kharn. Learning something today, which I'll need to look into more.

        • whyisave on 01/10/2019 - 19:53

          Good explanation.

          ( See below, about what I am trying to understand - difference of redraw vs offset (for investment purposes).

        • thydzik on 01/10/2019 - 23:25

          not many people would have an investment with a fully offset PPOR

        • vawiyoci on 02/10/2019 - 11:55

          So for owner occupiers who aren't planning on turning their current house into a rental sometime in the near future redraws would be ok?

    • whyisave on 01/10/2019 - 19:52

      I want to understand the difference between a redraw and an offset, for an Investment property, for variable P&I.
      The loan was established from a 20/80 split (20% deposit, 80% loan)

      If loan is $100K
      and there's $60K in the offset,
      then the interest is being calculated on 'remaining' $40K, right?

      Every year, I put in $10K into the offset, and so in 4-years, I should have $100K in the offset too, right?

      Why would redraw be 'better' than 'offset' ?

      I am just curious and I'm not being arrogant about it. Just trying to understand some perspectives.

      • Steptoe on 02/10/2019 - 06:01
        +1

        Leave money in 100% Offset for investment loan.

      • lainey13 on 02/10/2019 - 20:47

        Redraw is not better.
        You want maximum allowed to be claimed for tax purposes. You can claim remaining loan amount so if you put in more as redraw you can't claim as much. If you put into offset you can claim full amount but only pay interest on full amount - offset.
        Also with redraw the bank will make this amount reduce over the life of your loan. So you will never wind up with 100% in redraw and 0 in loan and you will never be able to withdraw the full amount you put in as it will be used to pay off the loan
        With offset you decide what you do with your money in the offset not the bank.

        Advantage of redraw is less fees usually. But not a big difference.

      • Slo20 on 03/10/2019 - 06:50

        Do you also have a owner occupier home loan? If so you should really be putting all that savings into your OO offset instead of your investment loan offset.

    • Trishool on 01/10/2019 - 20:16

      You should add a total fees at the bottom of your summary for each lender.

      • whyisave on 02/10/2019 - 11:05
        -1

        it was done —> here

        Fees for Homestar:
        Application Fee $0
        Valuation Fee $248.08
        Legal Documentation Fee $264
        Fixed Rate Lock In fee (optional) $395
        PEXA Fee $56.43
        Government Charges and Search Fees At Cost
        Verification of Identity Fee $27.50
        Monthly Account Fee $0
        Annual Account Fee $0
        Discharge Fee $535(plus third party costs)

        Fees for Athena:
        Athena application fee $0
        Athena monthly fee $0
        Athena annual fee $0
        Athena redraw fee $0
        Athena exit fee $0
        Application valuation costs $0
        Solicitor settlement costs $0
        Government refinance costs These include title registration, discharge of mortgage and title search fees and vary by state in the range of $260 - $440.

        • systmworks on 03/10/2019 - 07:14
          +1

          I'm pretty sure they were referring to your original post - and asking for a total at the bottom for easy comparison.

          • whyisave on 03/10/2019 - 21:57

            @systmworks: have you seen all the caveats and asterisks for all of their fees and charges?!

            I couldn't simplistically just list the fees, because they varied for different loan types, borrower circumstances and it wasn't as standardized as other lenders.

            Basically, the discharge fees from a person's current lender might eat up the savings of switching to a lower lender with all of their fees, and then you also have to consider the offset vs redraw question too.

            Anyway, I'm after a specific loan (Investment P&I Loan, with offset) and the lowest the better, i.e. sub-3% :-)

    • thydzik on 01/10/2019 - 23:27

      Can you have a eftpos card with the redraw account?

      biggest issue with the redraw is you need to keep some money in a transaction account, which costs you in interest savings

    • DealSa on 01/10/2019 - 23:31
      +1

      Homestar finance does have an offset account and fee free redraw. I recently acquired a owner occupier home loan and the product auto came with an offset account. I have also had all rate drops passed on.

    • skysurfer on 02/10/2019 - 15:28
      +1

      I just got off the phone to Athena about a new home loan and they gave me some fees you listed above as zero. Maybe you're talking about a different product but they have a set up fee of $840 and a valuation fee of $300 for new loans.

      • WazzaP on 02/10/2019 - 23:38

        Their site shows that for all loans they have no application/setup fees, no valuation fees etc - only the govt fees. Also given their comparison rate is actually lower than the advertised rate (due to the discount per year) that's also showing no fees (those with up front fees have a higher comparison rate). I'd be asking them WTF the go is!

  • bdl on 01/10/2019 - 20:11

    Homestar runner

  • ihbh on 01/10/2019 - 22:14

    Mandy Sly

    Not a good name for someone in finance!

  • Amanda3724 on 01/10/2019 - 22:28

    I've been with Homestar for the last couple of years. Competitive rates and all rate cuts have been passed on in that time; albeit with a few weeks'delay so they can still make more money. I'd recommend them.

  • thydzik on 02/10/2019 - 12:27

    Weird that the rate are higher (2.94%) for loan amounts above $850k, I guess they want to minimise risk.

  • countmein on 02/10/2019 - 22:25

    Really considering to switch but my lvr is about 82-83% depends on bank valuation. Would the LMI be pro-rate? Dont want to pay lmi anymore. 500k+ mortgage here would they even consider?

  • whyisave on 03/10/2019 - 22:08
    +1

    Since I am after an Investment loan (P&I, with offset and LVR ≤ 80% ),
    here are the current Investor loan offerings (NOT their comparison rates):

    2.99% Reduce Homeloan
    — https://www.ozbargain.com.au/node/486902

    ^ this loan has a high application fee, whereas their $0 fees investor loan rate is 3.09%

    3.09% Freedom Lend
    — https://www.ozbargain.com.au/node/487227

    3.14% Homestar Finance
    — https://www.ozbargain.com.au/node/486919

    3.24% Athena
    — https://www.ozbargain.com.au/node/486909

    3.49% Ubank 2.84%
    https://www.ozbargain.com.au/node/487030

    PS: No offset account offered for:
    - Athena
    - Ubank

    • systmworks on 04/10/2019 - 13:00
      +1

      Also worth noting with Reduce the Offset is $10/m ($120 / year).

      So you need to keep at least $4,014 in the offset account all year, to offset the $120 fee.

      • countmein on 04/10/2019 - 17:20

        Not a math nerd but how did you come up with $4014 number? Thats precise

        • reddwarf on 04/10/2019 - 17:40

          120/0.0299 which comes near 4014

        • systmworks on 05/10/2019 - 12:03

          Yup as above, yearly cost divided by the interest rate = the amount required to offset the cost.

          $120 / 0.0299 = $4013.38

  • alpln on 10/10/2019 - 15:17

    Requires PAYG employment.

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