Called ING today to adjust variable portion of loan as they advertise lower rates than I currently have. Few hours later they offered 2.34 instead of the old 2.64….worthwhile checking with you lender and save some money while the fun lasts…
Variable home loan rates falling. Give em a buzz
Pascal on 11/11/2021 - 22:58
Last edited 11/11/2021 - 22:59
Last edited 11/11/2021 - 22:59
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Usually the very low ones have stricter criteria
Yep this. Most of the ultra low rate lenders won't go over 80% LVR and aren't really helpful towards younger first home buyers.
If you need over 80% LVR then LMI gonna cost extra too.
@CMH: Yep. If you look at LMI rate tables though, you'll find that 84% to 90% LVR isn't too bad if you're in a deposit-constrained situation.
Using CBA rate tables for instance and a $800k property:
LVR Deposit LMI 80% $160k $0 84% $128k $7.3k 85% $120k $9k 90% $80k $17k 91% $72k $27k So if you're looking at 91% LVR, you definitely want to get to 90% - saving/scrimping for that extra $8k deposit saves you $10k in LMI!
Conversely, if you're already stretching your deposit cash at 84% LVR, you might be happy to take the $7.3k LMI hit (in exchange for not waiting longer to find an extra $32k of deposit).
Thanks OP - will give this a go.
Any tips on who you ask to speak with?
Did you have to push or were they pretty easy going?Just called the general service number and weaseled through the automated menu. Say you saw the rates were adjusted on their website and if they can adjust yours too, in order to stop you from the temptations of shopping around…this was enough in my case. GL!
Athena.
Needs <80% LVR (or <60% LVR for their best advertised rate), so its tough for first home buyers to meet (at least in captial cities). No offset either - the redraw is supposedly functionally equivalent, but the money is in their control rather than yours while in redraw which may have some drawbacks.
Having said that… I am watching Athena eagerly and waiting for my LVR to drop :)
i refinanced with westpac and locked in a 4 year variable at 1.99% … pretty sure there will be a crash after this covid stuff, so locking in the rate will be helpful
How did you lock a 'variable' rate? Am I missing something….
If you're anticipating a post-COVID crash, that would mean interest rates staying low.
There has already been a covid crash, in 2020.
People that are waiting for another covid crash can have fun staying poor.
So I rang up ING, told them I had been looking around at the new rates and found the dropped rate on their website. They also asked how I felt about ING and I told them that things were fine now, but I honestly wouldn't have gone with them if I knew how painful the application process was (also true - so much back and forth, and their team screwed up loan calculations which wasn't caught until the settlement day by the lawyers… hella stressful time).
After half an hour of polite conversation I got my rate dropped to 2.3%! Thanks OP for the heads up!
Note I was told that the base variable rate hasn't actually dropped - the discount offered on the rate had dropped, hence why the rate hadn't automatically dropped for my existing loan. Smells like a penalty for people who didn't check their rates, but on the flip side the "discount" isn't supposed to change over the loan life, so hopefully this means I have a bigger buffer against future rate rises.
Well done, tbh I didn't understand the whole discount thing (1.81 right?). What is that supposed to mean?
From my understanding there's two rates (numbers are examples, I don't recall what the exact numbers were):
- The underlying variable rate, which is the same for all customer loans and changes with the RBA rate (RBA 0.1% + Bank Margin 4.4% = 4.5% variable rate)
- The rate discount, which does not change and is fixed to a customer's loan (Variable rate 4.5% - Discount 2.2% = 2.3% = your effective home loan rate)
It really just sounds like a way for banks to offer a lower rate to their new customers (by offering a bigger rate discount) without passing on that lower rate to existing customers (which would happen if they modified the variable rate). I think this is also how loans with "introductory rates" are structured, by offering a limited-time rate discount (though ING doesn't do this kind of thing AFAIK).
On the flipside, the rate discount is supposedly fixed and stays with your loan account for its lifetime. So in theory, if you are paying attention, you can negotiate a bigger rate discount when you see special offers happening yet retain that discount when the offers expire.
Thanks for your post, I called ING Today and they dropped my variable from 2.54 to 2.09 in minutes.
A quick google search will show providers with rates as low as 1.85%, I'd be calling ING again if I were you.