UBank Home Loan 3 Year Fixed Rate 1.75% (2.22% CR). Comparison rate is based on a secured loan of $150,000 over the term of 25 years.
Owner-occupier P&I loan.
Apply by 26 February 2021 and settle within 90 days of applying.
Note: A fee of $395 applies on a fixed rate home loan to lock in the advertised rate (as at the date of your application) for a period of time. This fee is waived for fixed rate loans that settle on or between 10 July 2020 and 31 March 2021.
Referrer and referee each receive $30 after referee makes 5 settled card purchases within 30 days.
The banks are stuffed. 0% is the floor, no where to hide. I'd buy houses not bank shares.
yeah, that's why the banks are so busy now. I want to refinance and just getting on the phone with a specialist takes ages …
Panic buying houses. At the moment people are buying regional to try to get COVID sea change. Unfortunately like Sea Change people are going to be trying to get back into the cities in 3 - 4 years once implications becomes clear.
@netjock: I'm interested in buying CBD property (apartments).
But in Sydney, I don't believe it's dropped significantly in the past 12 months. 🤔
@Midcrown: Investment for the next 15-20 years, then for myself in retirement or for my son when he moves out.
With my (limited) budget, a house within walking distancing of CBD is not attainable. it'll be more like a terrace house.
An apartment in the CBD is more of a lifestyle investment than a purely economic investment. In which case I'll do what netjock has advised below and look for houses in employment/population growth areas.
Back on topic, the rates from UBank looks good, especially with the waiving of fees and no ongoing annual/account keeping fees.
Whereas with the big bank's cashback offers, the annual/monthly/b.s. fees claws most of it back after 3 years.
@PoKGuy: If you want negative gearing and massive capital gains buy houses. You probably only got 1 shot because take up $800k loan (at 20% deposit) it will be your only mortgage unless you make more than $200k a year.
Apartment holders are playing it like the stock market. Nobody is selling at a steep lose. At least another 12 months before migration happens so blood bath might still happen.
Apartments are good for positive cashflow and income stream at retirement. Or if it is convenient good for retirement (you got gym and pool in the building) unless you like gardening.
@netjock: You need to shop around with lenders get a new broker, or reduce your monthly expenses.
I've been able to secure lending exceeding 7 figures with an income well below half your suggested income. I've also found multiple lenders able to secure additional lending exceeding 500k.
@Sebby: Okay mate. I think you need to visit a doctor if you believe everything is a personal attack.
Repayments of $4k a month, 30 years at 2.5% interest (use variable, you can't use fixed rates as that is temporary) and they will only allow $1m of borrowing.
Assuming you take home $8k a month after tax (that is approximately $150k salary after super) it is 50% of disposable income.
You think you can borrow another $500k. That means you are paying $6k a month and living off $2k a month.
Maybe your mortgage broker is just fudging the numbers. Maybe the housing market is built on everyone telling lies about their income. Who knows but the numbers don't lie.
@Raif: People realising how crap living in the country can be. (speaking as someone who lived in the country for most of their life)
@Pseudomocha: It can be crap just as living in the city can be crap. Lot of variables, but it seems unlikely the growth rate to regional centres, particularly those close to capital cities in recent years will be completely reversed. I own properties in Sydney and Regional NSW; had good growth before COVID; been insane since. Last valuation on one property showed 18% yearly growth last two years. Albeit depending very much on the particular town, but it would seem likely that COVID has accelerated a trend to move to regional centres. That growth won't last but I wouldn't be hedging my money on a dramatic return to cities. Also not sure on the sea change comment as the growth numbers in regional coastal centres certainly don't bear our that they are substantially returning to cities either.
@Raif: Food, art, beer, music, architecture, culture, variety, people, hospitals, medical care, schools and universities, business, trade, ports, airports. You know all the stuff cities have in spades.
@ufoninja: Yes indeed.
Some ppl enjoy the country and hate the city and the stress/energy it brings.
It's just personal preference really.
@ufoninja: I moved to a regional area. All that stuff is here or irrelevant to me as an under 40. Never moving back to a city again. Rat race. Lifestyle and peace is out here. No stress.
@ufoninja: You're aware that many country cities possess all of these things?
Except ports. They're kinda rare. And specific.
@Raif: Read up on the Spanish flu. People always flock back to the cities. Urbanisation has been going on for centuries. Those who don't read history are the ones who believe this time it is different, history repeats it is just a different set of people.
@netjock: People flocked back to cities when they needed to return for work. There were no other options. The game appears to have changed and to have already been changing. That was already a global trend that we had been slow to embrace. Evidence before COVID was that there was a gradual trend towards moving to regional centres particularly those close to capital cities. I'm convinced that businesses have realised that they can employ many staff to work from home; get the same productivity and save overheads.
@netjock: When napster is forced to close, people didn't return to buying CDs. The switch to online music was permanent. After covid, people don't go go back to office to work. The change is permanent. Sometimes technology needs a bit "circumstantial push".
@enveloped: Okay if you think so.
People are going back to vinyl now. Don't know how you explain that one.
@netjock: Pretty sure working from home is a permanent thing now. CBD prices are taking a permanent hit.
@jaimex2: Just white collar jobs. How do you Uber drive from home or manufacturer canned food from home I have no idea.
If Ubank are offering to lock in 3 years at 1.75% they are probably intending to lower variable rates below this rate over the next 3 years.
It’s classic how people still think this… variable rates are pretty much as low as they can go… maybe could go down a bit but not as low as the current fixed rates.
Is this offer better or St. George's 1.99 4 year fixed?
st George is 1.89%
I think it would depend on the amount of your loan and LVR.
To get the effective annual rate for the St. George offer you would:
- start at 1.89%
- add 0.05% if LVR is above 60%
- deduct $4k bank rebate divided by 4 years divided by outstanding loan amount
- deduct broker rebate divided by 4 years divided by outstanding loan amount
- add annual package fee of $395 divided by outstanding loan amount
The UBank offer is 1.75%. No need for additional calculations if you manage to get the rate lock in fee waived.
Works well for small loans I guess. Bank rebate less package fee is about 600 a year.
Interesting, just 2 days back, NAB (uBank owners) published a report, that rates have reached rock bottom and RBA won't be able to support any further lowering of rates, and rates may now start going up. What they did is exactly opposite!
No one knows
Official rates have. If you look at margins in the UK retail banks it is like 1.2% or 1.3% so you can imagine rates going low as 1.5% if one of the banks are crazy enough. Australian banks have just been lucky. Commonwealth Bank's market cap is higher than some of the big4 banks in the UK and they have 3x bigger population.
lucky to have a big 4 oligopoly with a tonne of market inertia cause people 'trust' westpac and co
The RBA has indicated they don't expect rates to rise for 3 years.
RBA have also said negative rates are a possibility, having said that it appears there will not be a need as the economy is going relatively well, all things considered.
Bank's profits are definitely cooked if this is the way we're headed.
Australia's in for a few years of plateauing prices, fortunately 0 immigration means we may have some wage growth, but as far as i can tell the 30% boost to prices that the experts are expecting are pure BS.
Mortgage rates only go down when the economy is contracting/not in a strong position.
The banks are calling in their mortgage holidays and at least in Perth we've seen a flood of investment properties come onto the market.
sideways/plateauing markets are also quite bad for negative gearers (which equate to roughly 65-70% of 'investors') cause each month they're losing money (and getting 30% back each FY), they'll need more and more cap gains to offset it in the future.
You are right.
Most people don't think who is generating the news. The banks want to put out the good news on property so they can write bigger loans. 1.75% of $1m is more than $0.3m. Which will in turn enrich their shareholders.
Lot of these news is through Domain / Realestate.com.au who wants advertising revenue.
Yeah, I didn't realise that Domain/Realestate.com.au were just extensions of the Murdoch Media empire. It's basically talking up your own business and masking it as news.
I think people are growing wary of this now and the FOMO vibe is disappearing.
I think people are growing wary of this now and the FOMO vibe is disappearing
I think deep down people know it when they find out that on a £1m mortgage, 2.5% over 30 years they are paying $422k of interest, $1m of principle. You don't spend your life paying the bank anymore, you spend it paying the principle you so willingly jacked up.
Hope I live to see the day protests about blood sucking home owners who made a big mole hill for themselves.
Sucker born every day. Just less now without migrants.
@netjock: https://www.smh.com.au/politics/federal/the-policy-risk-emer…
Not sure who paid for this article but already spruiking property prices will go gangbusters this year and FOMO is back…
Don't lose any sleep about bank profits, they will still be posting record profits over the next few years. Low and high rates are good for banks, they can make money in all conditions
Wish someone would offer a good rate and an offset account.
Was considering tictoc but seems it's not really an offset account, closer to an account that pays the same interest rate as the loan rate.
Wish someone would offer a good rate and an offset account.
Why would you? Put it in VGS it is paying 2.8%.
VGS has a risk though.
Short to medium term. Long term 7%, 5% margin
An offset account is not so important when the interest rate is < 2%
That really depends on your loan size and how much you'd have in the offset account
My statement is still correct. You may have misread it.
@Cheapskate Paul: @kulprit is also correct. His point doesn’t make yours wrong… but then, you may have misread it.
@kulprit- I am with Bendigo on their fixed rate offer from Aug'20-Aug'21 @ 2.35
Now I also have around 52K of saving in the offset account but I am not able to calculate the interest per month I should be paying. My current loan is standing at 365K with 52K in offset account. Is there a basic calculator available to get an idea how much interest I should be paying per month, don't want to blindly trust the bank.
@IpGem: Forget the daily compounding etc and just get an approximate.
365 - 52 = 313k.
313000 @ 2.35% = $7355.50 interest per annum.
7355.50 / 12 = $612.96 per month.
This doesn't take into account the fact that you are making repayments so the principal is getting lower, or the daily compounding, or your offset growing but it gives you an idea.
@kulprit: @kulprit Thanks this definitely helped! That's about right, I sometimes get an interest of around $611 and sometimes it's around $623.
@IpGem: This depends on a 30 or 31 day month. The February interest payment should be your smallest. And slowly go down each month as your principal goes down.
maybe have a look at freedomlend rates not too bad with offset account.
and Tic Toc
My broker told me UniBank for 1.95% fixed for 4 years with 100% offset!
Ubank does not do offset account right?
Tictoc does have offset, just costs $10 a month if wanted
Yes it does, but it seems the terms and conditions say it's not the same as an offset account with a normal bank.
Source? I have a tictoc loan, with an offset account.. They just resell Adelaide bank loans
@tzar: https://tictoc.com.au/home-loan-guide/offset-accounts-and-th…
This page, under how the tictoc offset account works.
@kulprit: Thanks! Interesting, it seems like more of a theoretical point of difference at the moment but could be annoying in the future. I suppose if they do mess with the offset rate I'll need to refinance
Correct, not the same as a normal Offset account.
The offset interest rate is not guaranteed to be equal to the home loan interest rate.
Interest is charged weekly, fortnightly or monthly depending on the repayment schedule. If not monthly, the compound effect of weekly or fortnightly interest charges will be higher than a regular Offset account with monthly interest charges.
if you already own a house with no mortgage, can you use it as security to get a loan for a new house without a deposit?
You will have to refinance, take that money to use as the deposit on the new house
refinance what? I own my current home outright
Bank will want to put a charge over your title. Then forward you the money so you can use as deposit on new property.
yes, you can get a reverse mortgage but understand that if something goes bad, the banks take the house that you pulled the mortgage from
sounds fair enough. the new house will be an upgrade
Reverse mortgage is for retirees with no income and doesn't require making repayments. The property is sold on death to pay off the loan.
What you want is a 'equity cash out' loan.
Yes
Make sure you keep them separate or the investment loan is not tax deductible.
Get a mortgage out on your current place for the minimum deposit for the new place and use that for th deposit. So you end up with two mortgages one small one on your home then a 85% one for the investment.
If you do it this way, the 85% loan is tax deductible. If you just use your current home to secure the investment (lazy way) , then the loan is not tax deductible.
This is wrong. It's not what it's secured against, it's what the purpose of the borrowing is.
Example I have a paid of PPOR and borrowed against it for shares, the interest is deductible.
You're correct, my accountant is wrong. Thanks
The property/s used to secure a loan has no bearing on its tax treatment whatsoever. For example, you could have an investment loan secured by your home and it would still be tax-deductible. The purpose for which the funds are used and who’s been making the repayments will determine the tax-deductibility.
My plan is to rent out my current home and live in the new home that I want to get a loan for.
Fixed or Variable at the moment?
I've always ridden the variable train but these fixed rates are quite tempting.
Someone suggested going fixed then shopping again just before it ends? Who knows whats going to happen in 3/4 years
Like you I would not deviate from the variable rate previously, but these low fixed rate subsidised by the RBA are too good to pass up. I am changing now
I'm applying for a home loan ATM and I don't understand why anyone would go variable? At this point variables are around 3.5% and fixed all around 2% - soif there's a 1.5% gap how can variable ever realistically go lower than the fixed rate???
My variable is at ~2.3% with homestar finance. Maybe shop around?
What do they offer for fixed then?
I agree variable will not go lower than the current fixed rates however there is a chance that the fix rates might go lower
That's what people said when rates were at 4%…
What is the minimum LVR to apply for this?
You need a 20% deposit minimum
will other banks price-match?
It's not just a matter of the bank, it's also who you get dealing with in negotiation. I've had two brokers from the same bank push two different interest rates, I am guessing one was willing to work for a smaller commission than the other.
So i guess, YMMV?
officeworks possibly
I switched to Ubank about 2 years ago since being with ING. Would recommend. They've continually passed on the rate cuts in full. Their 'offset' is weird at first but you'll get used to it. Takes about 2 business days to redraw and clear money when you need it. Otherwise it works like any other offset
I am confused. I thought UBank doesn’t offer an offset account.
I’m with UBank. Think you have confused a loan redraw with an offset account. UBank allows redraw if you are ahead on payments. Takes 1-2 days for the redraw to be processed. This is not the same as an offset account.
Ubank only offers a redraw facility not an offset account.
There are drawbacks that may or may not matter depending on your circumstances.
- Money in redraw is not covered by the goverments guarantee of deposits for ADIs
- For investment properties there are tax advantages to having an offset account over a redraw
- Convenience, money in offests is usually accesible via eftpos card, you can bpay, transfer like a savings account quick etc. Redraw not so much
- Your lender can refuse your redraw
I used to use my UBank loan account as a transaction account in lieu of an actual offset account. I thought that was a well known hack. What’s changed?
Nothing has changed.
Redraw facilities work well for most, but offsets don't have the downsides mentioned above.
Jesus, these numbers keep getting lower!