Best Home Loan

brainactive on 05/07/2021 - 16:58
Last edited 05/07/2021 - 20:11

There seems to be a "Best Transaction Account" poll on Ozbargain but not "Best Home Loan" poll.

What is the best variable home loan (with offset account) and what is the best fixed home loan? Is there a spreadsheet comparison somewhere, similar to the many available for transactions/savings accounts?

So far I have found this from St George. Is there anything better?
1.84% 2 Years
1.93% 3 years
2.14% 4 years
2.44% 5 years
2.49% Variable

Edit: I'm after P&I loan for PPOR at 80% LVR with option for split loans with both fixed and variable component. Large portion of loan will be in fixed plus a few variable loan splits for debt recycling. Want an offset account too.

Financial Home Loan Loan

Comments

  • hothed on 05/07/2021 - 17:44

    Can you please clarify if this is for PPOR or Invesment? Any fees?

  • avoidfullprice on 05/07/2021 - 18:25

    What is the best variable home loan (with offset account)
    st George
    2.49% Variable

    Is that part of the package with $395 annual fees?

    Any minimum/maximum LVR in your comparison?

  • Jugganautx on 05/07/2021 - 19:00

    those are fixed…

  • p1 ama on 05/07/2021 - 19:07
    -4

    1) Never fix your rates

    When you are fixing your rates, you are betting against the bank. (Think about it, the bank would not offer you that fix unless they believe they would make more from you than if you went variable).

    I used to work in interest rate derivatives markets - you have quants with maths and computer science PhDs, actuaries, data scientists running complex rates models. This is literally a multi-million dollar team. Do you want to bet against them?

    This is not to mention that there are a whole boat load of other inconveniences that come with going fixed - e.g. penalties for earlier repayments, usually a fee to fix your rates…etc.

    2) You can't rank home loans like transaction accounts because it depends on what you want/need and who is willing to lend to you. If you want the cheapest rates, go with an NBFI (e.g. TicToc) who will beat the big banks, but will regularly have more stringent lending requirements, have less in the way of customer service and have less "package discounts".

    FWIW, I'm surprised that there is even a discussion around "best transaction accounts". Basically they are all the same, as long as it is free. If you are paying, then find one that is free.

    • bemybubble on 05/07/2021 - 19:31

      Re point 1. Perhaps having the goal posts set is what people are chasing though?

      • p1 ama on 05/07/2021 - 23:39

        That's fine, but understand that on average you will be worse off fixing your rates.

        I never get why this seems to be such a maligned point (see number of negs on above post, I suppose). It's exactly the same thing as saying that you should not gamble at the casino.

        Of course, some people do win at the casino, just like some people do end up better off with fixed rates, but the bank will charge you a house edge the same way that a casino does. This is coming from someone who has literally worked in the area.

        • El-Rhi on 06/07/2021 - 07:01

          COVID changed everything re fixed versus variable. There has never been a better time to fix your rate since banks have effectively been receiving 0.1% fixed rate funding via the RBAs TFF, which they have passed on via much lower fixed rates compared to variable.

          Plus, rates can only go up from here so fixing now will mitigate any future rate rises.

        • brainactive on 06/07/2021 - 08:37

          2 year fixed is 1.84%
          Variable is 2.49% currently

          If I fix for 2 years and then switch to variable, does that mean for the first two years I get a lower rate and then for future years beyond that I get the same rate (rate might not be 2.49% in 2 years time but it will be the same as if I had variable from the beginning). Is that correct? If so isn't it better to fix now and then switch to variable if fixed rates are unfavourable after 2 years?

          • El-Rhi on 06/07/2021 - 12:11

            @brainactive: When you come off a fixed rate you revert to a higher variable rate, so if it was still 2.49% in 2 years you’d likely be paying around 3.2%. That’s why it’s smart to refinance when coming off a fixed rate.

            • brainactive on 06/07/2021 - 12:16

              @El-Rhi: When you say refinance, do you mean switching to another bank? Will another bank treat me as a new customer and hence give me the same rate as an existing variable rate customer?

              Also, are there usually any fees to switch to another bank after end of the fixed term?

  • oO0Dam0Oo on 05/07/2021 - 19:55

    Where are you seeing 2.49% Variable with St George?

    LVR%?
    PPOR?
    P&I?

    I think post needs to be more specifically targeted with these variables considered.

    Eg best owner occupied P&I variable home loan rate based on 70-80% LVR with offset and redraw facility.

    • brainactive on 05/07/2021 - 20:48
      +1

      Sorry for to post those details. I've now edited original post to include.

      • avoidfullprice on 06/07/2021 - 08:51

        The 2.49% product doesn't come with offset.

  • rektrading on 06/07/2021 - 08:17

    The central bank will keep the cash rate at this level or go lower for as long as it takes to get people to spend money using debt.

    Do your part and stimulate the economy by tapping those cards.

  • Muselibar on 06/07/2021 - 12:38

    I think the rates with St. George have recently changed (gone up) you might be able to negotiate this but could be tricky

  • soan papdi on 06/07/2021 - 13:44

    Macquarie is 2.49% at 80% LVR with $248 annual fee for the offset account and an optional credit card.

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