Another question for the resident brokers

Thanks in advance

Life sort of gets in the way - and I have sort of neglected looking at my loans for a while but I have just recently gone over my current lending situation

Currently have about 3.3mil lend with CBA at about a 53% LVR

PPOR and several investment loans

with all the recent changes with interest rates - i'm paying different rates depending on the loan

I get a 1.35% discount off the Std variable rate - which they gave me after much arguing over the fact that new clients were getting 1.5% discount ( this really makes my blood boil that they give new clients better deals than existing clients )

I have several investment I/O loans which i'm paying 4.89%

I have several investment loans which have switched to P and I and i'm paying 4.45%

I'm paying 4.42% on my PPOR - which is fully offset - so I don't really care about this rate

All these different rates is giving me a headache - They have different rates for PPOR and investment loans and different rates if P&I or I only

After doing a bit of research I think I get get a better deal elsewhere - particularly if i'm happy to go P&I on my investment loans

I noticed several 3.82 - 3.84 deals going around from the likes of Macquarie , BOQ and Citibank

That's a huge saving

I would be interested in the thoughts of the resident brokers on my situation

Cheers

 

It will depend very much on your borrowing capacity. $3.3M of lending is difficult to move these days unless you're on big $$'s.

It's definitely worth having a chat to see what's possible in your situation though - but you'll find that across the board, there are tiered rates depending on security type and repayment type. If you're happy to go P&I across the board, you'll be able to have them all the same rate, in theory.

 

Thanks guys - I must admit - I thought that might be the sticking point

I have had Westpac say to me in the past that they could do a better deal but couldn’t help due to servicing issues

 

Hi Rolf

What sort of retention pricing have you seen of late ?

 

If I was able to move - which I’m pretty confident should be able to due to a change in circumstances - what strategies would you guys recommend moving forward ?

 

Best to speak with an investment savvy broker first to see if you can actually move at all - you've said WBC said no can do previously so that might be a signal that you're not going to have a lot of luck. If you can move then the broker can obviously then explore what is the best option for immediate cost saving and your longer term goals.

Worst case if you're stuck with CBA, revert the loans to P&I if cash flow permits and get a rate reduction. Note that if you're intending to borrow again, flicking these loans over to P&I may erode your borrowing capacity with the higher servicing rate lenders - but if you're looking at holding your existing portfolio and not expanding further this is a non-issue.

 

Thanks guys for the help

Westpac knocked me back 2 yrs ago with a 1.65 % discount - serviceability being the issue then

Sad I missed that one

Things have improved on the serviceability side since then - hopefully not a issue now

Does switching across to one of those 3.8 something P and I deals seem like a good idea - the savings seem to suggest that

Cheers

 

It really needs a discussion about your plans for the future, as paying P&I will have long term implications if you're still looking to grow a portfolio. It will also depend on what your borrowing capacity currently looks like.

While it's easy enough to switch to P&I, it's much more difficult to switch back for many people, so the pro's and cons need to be considered in the context of your big picture. It's not a generic yes or no answer.

 

Servicing has changed a LOT in 2 years.

Banks will pluck all sorts of rates and number from the air now. They dont even use real interest rates but subject you to far higher rates to test a little pain. These days a great broker is well worth contacting. They know all the issues

 

Thanks for the great info guys - I didn’t realise it would be hard to change back to interest only after moving to P and I . Definitely a point to remember

 

It may or may not be - depends on your circumstances.

 

What @Corey Batt is suggesting is correct...

In the end, if you are out of capacity anyway you arent forfeiting future opportunities by moving to P&I. Under those circumstances its a prudent move to switch to P&I - especially if you can effectively keep repayments at or around the same levels but start paying down debt.... in the longer term it will help restore some borrowing capacity as well.... without needing to sell things off.

 

Just a update


After talking to several banks


The best rate I can get at the moment


Macquarie private bank


PPOR 3.54 P/I


Investment 3.74. P/I


Investment 4.14 I/O


BOQ has come a close 2nd


This seems very good deal particularly compared to what I’m paying now


I would be happy to hear if anyone thinks that there is a better deal out there - particularly with any of the majors


None of the big 4 have come close to this deal when I talked to them

 

I have given them full financials including bas statements - they said they can get the deal over the line

 

Thanks Rolf

Haha - I suspect it might have been a combination of all 3


I have not taken the decision to move lightly but at inexcess of a 1% difference between what I’m paying now at interest only to switch to P/I to a different bank - that’s too much of a difference to ignore. $30k saving per yr

I was going to look at Citibank and HSBC before I lock a deal in

If it did come down to Macquarie Private Bank vs BOQ Specialists which do you think would be better from level of service and ease of use - eg getting the loan through and day to day banking