Suncorp Bank have just announced they are lowering their fixed rate 2 year Home Loan to 1.89% - seems like it could be a good deal, especially if you already have the Home Package. Comparison rate is 2.89%
Discounted 2 Year Fixed Rate in Home Package Plus (HPP). Owner Occupied. New to bank lending in the HPP >= $150,000. Maximum LVR 80%. Principal and Interest repayments.
Also think of home prices to wages gap now which was not that steep in 80's..
You're looking at it the wrong way. The cost of a house isn't just the sticker price.
Repayments are a bigger factor, which means you also need to take into account interest rates (eg $300k @ 16% has the same repayments as $1.1M @ 2%), as well as the household income (not just a single person). In the 80's single incomes were a lot more common, as double incomes increased, the ability to repay increase at the same time.
Let's not also forget that a 2020 house has shit load more quality features than a 1980's house. double glazed windows, solar power, 70 inch TV's, aircon, stone bench tops and stainless appliances etc. This was the stuff of millionaires when I was a kid, now it's considered standard.
The 80's is not a universal constant for what houses should cost.
@1st-Amendment: the difference is that if you bought a house in the 80s.
you can buy a few new ones now. regardless of how shit your 80s house is. the land appreciated in value.
remember the quarter acre blocks? that's a myth now. you are justifying these 'modern comforts' that are squeezed into a sub 200sqm block of land that are selling for over 1Mil.
remember the pensions that people working in 80s get to have? the golden handshake from jobs? I know a few oldies that retired with those. They sold away all their land and rented a small unit, minimal maintenance and golf all weekend.
people actually working 9-5? no 'on-call' because mobile phones were too expensive? and pagers were only reserved for people who actually got paid OT?
there were actual legit studies that compared the cost of housing back then and now, and the amount of income disparity to back all of those things up. This study included DINKs as well.
i disagree with your statements.
@slowmo: You didn't actually dispute any of my statements, you just put your nostalgia googles on and mentioned all the good things from recent history without mentioning any of the bad.
there were actual legit studies…
They must be legit because you said so…
i disagree with your statements.
You disagree with $300k @ 16% having the same repayments as $1.1M @ 2%? If you disagree with maths it's no wonder you are struggling.
You disagree that household incomes have increased? https://aifs.gov.au/media-releases/families-then-and-now-how…
You disagree that houses are higher quality with more features than the 80's? https://www.budgetdirect.com.au/blog/how-australian-housing-…
But sure, you put your nostalgia googles on and hope hard enough for 1980's house prices to come back and see where that takes you lol…
so I think we should be lucky that we are getting these interest rates as low as they are now
The flip side is we've never seen principle payments so high. I am waiting for the day when retail rates go to zero and it will still take people 30 years to pay off the principle. That would be hilarious.
hahahahah wait until interest rates go back up to 16% which i wonder if that will happen again within the next 30 years (since thats how long my home loan will be for)
@prankster: No joke. Central banks have basically created a rod in their own back! If they raise rates then everyone will be paying their mortgage and retail / hospitality will be stuffed.
Look at USA. Went from 0.25% after GFC to 2.4% in July 2019 then had to start lowering it down to 1.55% by Dec 2019.
RBA rates you can see is on a downward trend as Australia had 30 years without a recession. You know it was propped up by successive cuts in interest rates
@netjock: and didn't we official get into a recession this year?
yeah i remember what happened in the states, crazy.
without looking into this further, aren't houses there generally cheaper than australia? hahaha depending on the location I guess
well lets hope interest rates stay the same (as in low) for a long time, if its under 3% then at least I can manage my home loan
and didn't we official get into a recession this year?
Yes.
without looking into this further, aren't houses there generally cheaper than australia?
Depends. Manhattan and San Francisco more expensive and a lot of places a lot less expensive. US has a different mortgage market as they have lot more fixed term borrowers. Just watch The Big Short. Problem is when honeymoon rates are over and SVR is a big jump. Especially when you can't refinance.
It is also still possible to buy houses in regional areas for $250k (obviously like 30 year old tiny house) but the problem is cost of tradies. Rebuild will be same price as capital cities but the value won't go up that much neither would the rent.
I heard from a suncorp rep over the phone this is only for new lending customers, not existing customers who are also owner occupiers. The wording in the message notification in the suncorp app "Suncorp Bank has announced a record low 1.89% p.a. two-year fixed home loan rate for owner occupiers, effective 19 November 2020." The word eligible is missing?
Threaten to leave and see what they say. Seems very unfair if they don’t offer this to existing customers - of course if you’re already in a fixed rate loan then that’s a different story.
Anyone can access the 1.89% rate (new or existing customers) provided you’re not already on a fixed rate.
Take your business elsewhere. I got offered 2k cashback when I told Suncorp I was leaving still wasn't as good as St George
"You can make additional repayments to your Standard Variable or Back to Basics Variable Home Loan at any time.
For Fixed Rate Home Loan, additional repayments of up to $500 in excess of your minimum monthly repayment are permitted. After that, an Early Payment Interest Adjustment Fee (EPIA) may apply."
Potential deal breaker as I have money in an offset account and plan to keep putting as much as I can in it?
Does this offer include an offset account or redraw only?
Did a search and seems like offset is only available for their variable home loans.
That's right, only a handful of lenders allow you to offset fixed loans. You can consider splitting the loan, to have both a fixed and variable component, which you can then offset. Obviously the more you have fixed (at a relatively lower rate), the less of a proportion that you can offset but your overall interest rate should also be proportionally lower.
Just for those that would like an alternative to compare
HSBC Home Loan Fixed 2 years is 1.88% (0.01% lower than Suncorp)
This sounds good but why is comparison rate do high?
Based off a low principle amount meaning that fixed fees are spread over a smaller base. If you have a high enough principle the effective rate you're paying is close to the fixed rate quoted.
Yours is the right answer, not sure why -1. I've restored the balance.
I added +1 to both of you because karma…
So, if you borrowering say $300,000. Then you better of with variable as comparison would be lower?
if i join Suncorp 2 year fixed, i can't break out of it to go with another bank if i suddenly decide 1 year into it? or i can just have to pay a break fee which would be expensive i assume?
yes, break fee but you need to check how it is calculated.
Getting conflicting information on their website. Is offset applicable here?
I believe this fixed loan doesn't have offset
You can split your loan tho (fixed + variable) and have the variable part with offset
fixed loans never have an offset
incorrect. Tic toc do 100% offset on their fixed rates
not worth the risk to lock in for 2 years. There is a high chance of even lower rates within the next year.
RBA chief not fan of negative rates but QE might mean they will be paying your mortgage in a round about way. Fixed rates are so low because RBA giving 0.1% loans to banks for 3 years. Basically they are subsidising your mortgage vs variable.
so in other words you are saying fixed rates wont move for the next three years because of the fixed 3 yr rate loan to the banks from the govt?
They can move if the banks decide to cut their own margins.
Alongside the drop in the official cash rate, the RBA lowered its three-year bond rate target to 0.1 per cent. The new record-low rate will also apply to the bank's term funding facility.
how much lower can it go? Definitely less than 1.89% :)
With rates being this low you don't have much down side.
My understanding is that under normal circumstances, fixed and variable are the banks way of gambling with the same wholesale rates, so under this system you normally lose with fixed because the bank always wins.
What is different this time is the the Gov/RBA has specifically allocated a special pool of low interest funds specifically for fixed rates loans to help stimulate the economy because of Covid. So in this case variable are unlikely to get as low as these special rates. However don't take my word for it, do your own research.
Can anyone tell what is Comparison Rate and why do banks mention it around the Fixed home loan? Does it mean that even if you are on 1.89% p.a. fixed interest loan, you are technically paying at the rate of 2.94% variable rate (when combining all the costs)?
Click on the link, scroll to bottom and it is there:
Each comparison rate is based on $150,000 over 25 years. These comparison rates apply only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. Comparison rates for Interest Only Fixed Rate home loans are based on an initial Interest Only period equal in length to the fixed rate period. Comparison rates for Interest Only Variable home loans are based on an initial 5 year Interest Only period.
If you borrowed a small amount of $150k then adding in all costs
and then they get a property valuer who happens to see that the property you purchase is overvalued. Thus you need to fork out more money for deposits, or leave the deal.
Make up the difference or bank won't approve.
exactly
I wish these fixed interest deals would lock the rate in for longer. My brother lives in the Netherlands and just locked his interest rate for the full life of the loan (30 years). What a dream that would be….
Why would you want this? Historically interest rate has only ever gotten lower.
If you did this a few years ago you'd be at 5%+ fixed rate
there is a good chance the fixed rates will move once the low rate govt loan ends.
Not sure what you are saying about 'historically only ever getting lower' (not true), but the rates at this stage can't get much lower - the Reserve Bank is on the last percentage point!
I can't think of a better deal than to lock it in now. It is not a matter of 'if' but 'when' before the rates go back up again. And that's when the trouble will start for a lot of people.
Remember we are talking 30 years here. No way the rates will stay the same for that long, and they can't go much lower.
Do brokers have access to the same deal?
My son bought his 1st home just about a year ago (rental was being sold) w/Suncorp @2.99 fixed for 5 yrs then variable. He put 20% down. Got a (I think) $2000 sign-up bonus.
Is this something negotiable with lower rates, or is he stuck? Sorry, I really don't know much about financing. Ta.
If it’s fixed for 5 years then no he generally can’t renegotiate during the fixed term without incurring potentially massive break fees.
anyone considering this be aware that Suncorp charges discharge fees per account. So if you have part variable and fixed, you get hit with the fee twice which works out to be $700 and whatever establishment fee the other bank charges if you refinance. Agreed that they all give out vouchers but I was told this is a recent activity and may not continue going forward.
I went to their website and asked some direct questions the other day re: annual fee waiver, extra repayments etc on this offer, I haven’t heard back, does anyone have another suggested best way to contact them?
I just call them.
Live chat. Took 2mins. Was on hold for 1hr
its funny how we are worried about the various differences of variable and fixed rate recently whether you got it at 2.24 or locking it now but I grew up in the 80's and remember the days when interest rates went up to 16% and then in 2000-2010 it was like what average 8% ?
so I think we should be lucky that we are getting these interest rates as low as they are now