Join Australia's most dynamic and respected property investment community

Advice about getting better home loan rate

Discussion in 'Property Finance' started by sylon, 27th Feb, 2016.

  1. sylon

    sylon New Member

    Joined:
    27th Feb, 2016
    Posts:
    3
    Location:
    Victoria
    I am currently with Bankwest. My LVR is only about 65%. 4.84% for part of the loan and 5.6% on other part that just came off a fixed term.

    They offered me 4.44% variable with no ongoing fees and free redraw facility with no minimum. I am reading online others being offered even 4.25% by CBA/NAB etc. How do I go about getting such a deal? I think I have a good credit history and never missed a payment.

    So far I have tried calling NAB and the lady on the phone pretty much rattled off what was on the site, said best they can do was 4.39% and $1500 rebate. Their redraw facility sucks though, $500 minimum, not like Bankwest's where if I want to I can draw just $10 or $20 as I keep all my money in my loan account.

    I also tried Bank Of Melbourne, again same stuff from their website 4.24% but a terrible redraw facility with $500 minimum and doesn't go back in balance till end of the month if I make an additional payment. The person on the phone wasn't very knowledgeable or good to talk to. I kept saying Bank Of Melbourne and he kept referring to St George, same entity but still not very professional, seemed confused.

    Ideally I want to stay with Bankwest or go to a good bank like CBA or NAB with a lower rate and offset account cause it seems like these banks don't have the fully flexible redraw any amount facility like Bankwest's. Any advice? I told bankwest I am going to look at competitors when they told me about the 4.44% and they said to bring other offers to them and they will consider matching it - how does that work? do I need a written offer?

    I am looking for variable rates only with a flexible redraw like Bankwest or a 100% offset account.

    I feel like my loan is quite low risk but I am being given the run around.
     
  2. Sonamic

    Sonamic Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    956
    Location:
    Sunny QLD
    A $500 Redraw is not that bad. Who goes to the effort of performing a Redraw to get $10? Get a mortgage offsetting savings account to keep your cash in. That would be easier.
     
  3. sylon

    sylon New Member

    Joined:
    27th Feb, 2016
    Posts:
    3
    Location:
    Victoria
    It works well for me. I make most of my purchases with a credit card, hardly ever need cash and when I run out, as I am walking to the ATM I transfer $20 or $50 out of my loan and take it out at the ATM. Offset would be better but most come with fees.
     
  4. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,782
    Location:
    Perth WA
    The really good pricing with CBA is on their MAV package which is $395/yr. They do have their 3 yr honeymoon @ 4.29% which is fee-free and that has redraw which I believe doesn't have a minimum unless you go into the branch. That might be an option for you.
     
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,043
    Location:
    Sydney
    This is potentially terrible. You have a mixed purpose loan if doing this. If the property were to ever become an investment you would be in trouble.

    Redraw facilities should rarely be used.
     
  6. Kinnon Bell

    Kinnon Bell Finance Broker

    Joined:
    14th Jun, 2015
    Posts:
    478
    Location:
    Cairns
    The discount you get is also dependant on on your loan balance, whether IO or P&I or OO or IP. There's a few variables come into play when pricing.
     
  7. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    2,458
    Location:
    Sydney & Gold Coast
    Best bet would be to engage a broker to help out with pricing. CBA are doing exceptionally good rates at the moment and have excellent loan products to boot.

    That said..

    Rates are rarely the most important piece of the puzzle.
     
  8. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,174
    Location:
    Gold Coast
    Will you be in this place for Eva or will u maybe buy a. Ew one and rent this One ?

    Ta

    Rold
     
  9. sylon

    sylon New Member

    Joined:
    27th Feb, 2016
    Posts:
    3
    Location:
    Victoria
    I don't know, it is my first home. As Terry said i have already used offset facility and made this a "mix purpose" loan. Didn't know any better and just concerned with paying this loan off ASAP.
     
  10. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,109
    Location:
    Melbourne, Nationwide
    Engage a broker, you can get some good advice both on rates and structure. I can see a number of potential problems depending on the specifics of what you're trying to do. Simply shopping around doesn't appear to be getting the best results and it may get you into trouble with future planning as well.
     
  11. God_of_money

    God_of_money Well-Known Member

    Joined:
    28th Jun, 2015
    Posts:
    75
    Location:
    Gold Coast
    it also depends how much you want to borrow.. mine is > x millions to get 4.15%
     
  12. Redom

    Redom Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    863
    Location:
    Sydney (West) and Canberra
    If rate is your primary concern you could get a fair bit cheaper with some of the online lenders. If you want to stick to a bigger bank, talk to a banker at one of the suitable banks or a broker and get the right option selected for you.

    The exact rate/offer you end up on will depend on:
    1. Bank you go to - full service banks typically cost a little more than the online cheapies. You pay for what you get though.
    2. Loan size and setup - some banks will charge you more for an I/O loan, some banks are cheaper for certain types of loans, etc.
    3. Features - a full serviced loan may cost a little bit more by way of fees/rates.

    Staying with BW and getting them to move closer to the rate your after may be the best option too. Avoids some of the paperwork/admin costs associated with a refinance to an external bank.

    Cheers,
    Redom
     
  13. RumpledElf

    RumpledElf Well-Known Member

    Joined:
    21st Jan, 2016
    Posts:
    137
    Location:
    Sydney
    I muttered at my bank guy that everyone else on this property forum I'm on has a lower rate than I do and he said he can probably get me a [reasonable sized] discount, depending on what the credit department people say.

    I want to buy another 2 properties in the next 3 years and want to know where my money is going between now and then so I'm looking at fixing my investment loans for 3 years, and leaving the PPoR one variable since it is so insanely small I'm likely to accidentally pay it off by then.