Should I Refinance? (Pro/Cons Listed - Discuss)

CaffeineCruiser on 11/10/2021 - 18:28

Here's my Dilemma…
Figured I'd get some OzBargain opinions on this!

Currently with Suncorp on 30 year total loan with below rates:
Variable home loan of 2.54%
Investment loan of 2.93%

I love the fact that I have multiple offset accounts and utilise all 9 for a variety of things such as discretionary spending for myself, wife, kids, savings, investment etc…
It's nice knowing I have that snapshot at any given time and that all the money is offset onto my variable home loan.

I am considering moving to Westpac due to a better rate and cash bonus (I will end up being about $1500 better off after deducting the refinance costs).
Westpac rates:
Home loan of 2.34%
Investment loan of 2.74%

If we take the basis of "minimum repayments", my calculations say I am saving approx $1500 per year.
I do however only get 1 offset account with Westpac and that means losing visibility of the existing split amounts unless I manage it through a finance app/spreadsheet.

Already spoken to Suncorp and am waiting a response but factoring in worse-case scenario, it'll be the above.

Would you refinance?
I'd love to hear your thoughts.
Anyone struggling with a single offset account or done a switch? I'm all ears!

Thanks

Poll Options

  • 5
    Yes
  • 16
    No
Financial Home Loan Loan

Comments

  • paulpavs on 11/10/2021 - 18:36
    +2

    Th inconvenience if managing funds through just 1 account would be a nightmare. See if suncorp can match the offer and save you the trouble.

    Have you tried other lenders?

    • CaffeineCruiser on 11/10/2021 - 21:07

      Tried a few "smaller" banks compared to Suncorp/Westpac such as 86400, Loans.com.au and ING but they don't accept my investment property type so I've proceeded with the interest of Westpac and they seem to accept my situation.

      I agree with your points - definitely trying to see if Suncorp can match the offer!

  • avoidfullprice on 11/10/2021 - 18:50

    From a bargain perspective, knowing your mortgage amount determins whether this is worth while.

    Also if any cashback to cover refinance cost. What fees are there that you're aware of?

    • CaffeineCruiser on 11/10/2021 - 21:09

      Not sure how the amount will determine if it's worthwhile but the cash bonus from Westpac will cover the refinance cost plus extra (bout 1.5k in my pocket from the 3k total).
      No other fees involved.

      • avoidfullprice on 11/10/2021 - 22:38
        +1

        Well I was thinking, with low balance, if your goal is to pay off your mortgage balance, why would you prepare to miss out 1.5k on net cashback, and 1.5k pa on interest to have visibility of the split? Once you paid off your loan, you can do whatever you want with 9 saving accounts. Save the headache.

        Then I thought, if you will save 1.5k pa from a drop of 0.20% interest rate, your balance maybe around 750k? Perhaps your strategy is not to pay off the loan but rather turn it into IP or flip it for gain. In that case, the savings you suggested prob not worth your management hassle.

        That's why I asked for your balance.

        • CaffeineCruiser on 12/10/2021 - 08:50
          +1

          Thanks for the clarity! I get what you mean now.
          Balance for Owner Occupied is around 1.1 Mill so I don't plan on paying it off anytime soon.
          Strategy is to pay more than minimum, save some aside and invest the rest considering interest rate is so low and I'd fix it before any massive increases in the interest rates.

  • aragornelessar on 11/10/2021 - 18:58

    The multiple offset accounts is why we moved to Suncorp… The only other banks that offer it is Macquarie and Newcastle Permanent that we've found so far so it totally sucks from a financial perspective. Right now we have about 95% of the loan amount as offset in the multiple accounts so trying to manage all that in one account would be terribly annoying. It would have to be a pretty big rate difference for us to move (but hopefully the bank doesn't know that…)

    • benwaffle on 12/10/2021 - 00:44
      +1

      CBA and Bankwest also have up to 10 offsets. I prefer their online banking over Suncorp

      • CaffeineCruiser on 12/10/2021 - 08:51

        Any particular "features" that stand out in the preference or is it really the user interface (UI)?

      • aragornelessar on 12/10/2021 - 11:29

        Cool, looks like a few more have joined the party since we last looked! Getting ready for a KDRB though so I think its more hassle to change currently but we'll definitely check out the other options when we can

  • soan papdi on 11/10/2021 - 19:08
    +1

    Macquarie offers upto 9 offsets and up to 4 loans per loan account ($248/yr) and their rates seem lower than what you quoted for Westpac.

    • CaffeineCruiser on 11/10/2021 - 21:09

      Thanks, will need to look into this as rates always seem to differ!

  • pantsparty on 11/10/2021 - 19:12
    +1

    AMP allows up to 10 offset accounts and has slightly better rates. Currently running a $3k cash back deal.

    Variable - owner occupied - 2.29%
    Variable - investment - 2.74%

    • CaffeineCruiser on 11/10/2021 - 21:09

      Thanks, will need to look into this as rates always seem to differ!

  • Zephyrus on 11/10/2021 - 21:42
    +1

    For a different perspective, you're willing to pay ~$1500 and money every month so that you can have multiple accounts?

    If there's no tax nonsense going on and it's just for budgeting, I'd change and just budget using an external app.

    • CaffeineCruiser on 12/10/2021 - 08:51

      Thanks, that's a good way to see it. Paying roughly $125 per month to have visibility seems abit much!

  • ShortyX on 11/10/2021 - 23:14

    I've heard of multiple offsets before, but we just have a single offset. We use a credit card to pay for everything (for rewards & pay it off in full every month) and use YNAB to track budget categories.

    • CaffeineCruiser on 12/10/2021 - 08:52

      How are you finding YNAB? Heard lots of great things but never came to use it.
      I use the same concept as you at the moment. 99% goes onto credit card and paid in full upon receiving statement.

      • ShortyX on 12/10/2021 - 09:39

        I find it great but it's quite expensive for a glorified spreadsheet but there are included features that we find beneficial. I've used it since 2011 so I'm on cheaper, legacy pricing. You can trial it for free for 34 days and it would be worth checking out the 'Learn to Budget' sections before diving in.

        YNAB don't support account syncing in Australia, but we were using BankSync for $3/month. However, we use the Coles Mastercard and syncing is no longer supported due to some changes on the Coles portal so BankSync can't pull the data anymore. Apparently, Budget Feeder can do it but it's $7.49/month.

        I just use a file download & import method for getting the transactions into YNAB.

  • miwahni on 11/10/2021 - 23:46

    Just pointing out that St.George offers up to 99 offset accounts, in case you feel the need for more. They often run a pretty attractive cash back too, although I don't know if they have anything going on at present.

    Just curious about your investment property type that loans.com.au etc didn't want?

    • CaffeineCruiser on 12/10/2021 - 08:54

      Thanks - There was a reason why I didn't go with St George (I did look into it) but I forgot.

      Investment property type - apparently they don't have "Dual key apartments/Split level units" as an acceptable risk to finance.
      i.e. Apartment/Units that have 2 entrances/2 fully separate places but under the title, there is only 1.
      In my case, I have Unit A and Unit B split across 2 levels under/above each other.

  • pasey25 on 12/10/2021 - 08:22

    I moved from Suncorp to Bankwest and retained the same number of offset accounts

  • kipps on 12/10/2021 - 21:50

    Try AMP, Macquarie and Bankwest.

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