ANZ 3.75% O/O 2 years fixed

CBA are doing a price beat - so a 2 year fixed at 3.74%. NAB dropped it down to 3.89.

 

Shame CBA are not pricing as aggressively on variable rates pre rba cut.

 

This is becoming like a game of russian roulette. First Westpac drops LVR's, destroys their servicing calc for investors and pulls out of non resident lending... now, voila! Back to offering a sharp I/O 2 year fixed rate for investors... and to 90% LVR.

Mortgage lending is starting to resemble the stock market... all over the place day to day.

 

Wouldn't we look at the comparison rate? If that's the case, variable's still very much cheaper.

 

The WBC 2 year honeymoon rate now looks attractive as an alternative to 2 year fixed now.

Stay with them for 2 years then refinance or negotiate

 

are these rates with CBA?

 

Wesuck, but cba are still matching any big four fixed rate offer.

 

Redom, or other brokers, for NAB I/O loans through brokers, what relevant part of the NAB fixed rates do you look at or watch ? as the product/names are different.

And is this new pricing in direct relation to the rate cut for the fixed rates ?

 

@tobe He might get confused with that. To clarify it's Westcrap.

 

@Redom , do you know from when the new rates will be effective for CBA? Do I need to go through broker to get this fixed rate or I can just switch through netbank?
Thanks

 

The special to beat other banks fixed rates are advertised on bus stops. So I'd say you would have a good shot lobbing up at the branch.

 

Surely the banks are forecasting further drop (and they're pretty sure about it) to be able to offer such rates.

 

I wrote about this months back...they're looking for short term business to top up their 10% I/O APRA threshold.. It will likely last @ 2-3 weeks, this particular special.... then it will disappear. Just watch.

Suncorp did the 3.99% I/O 3 year in March ... it came, and it went just as quickly as they got inundated for @ 3 weeks...

Then STG did a cheap 3 year I/O ... now Westpac are doing a cheap 2 year I/O

Don't confuse this with the cheap fixed P&I deals on offer .I/O and P &I are two different games ..... for P&I lending the banks have no limits on how much volume they can lend. For I/O they have a 10% speed limit.

What everyone also needs to understand is that the APRA 10% speed limits aren't annual... they are measured on a year by year, month by month basis .... so for example - if a lender wrote 10 billion in I/O lending for April 2015, they are allowed to write 110% of that amount in April 2016, and then 110% of the 2016 amount in April 2017 etc...

Hence, any time a lender has a little capacity within it's monthly 10% threshold, you'll start to see them come out with a "special" ... but it wont stay around long, because they cant risk breaching the monthly speed limit, or they'll face stiff tier 1 capital provisioning penalties

 

Comparison rates are pretty much useless. They are measured on a 150K loan balance and assume that you stay at that exact loan limit, and in that exact loan product, with that exact interest rate , for 25 years.

 

Looks like the Westpac family - Westpac, STG , BOM, BSA etc... have a little space to start I/O lending again.

We had Westpac announcing 90% I/O lending on Friday, and today we have STG - see below.

As I had predicted previously, the aggressive LVR reductions taken by some lenders were likely to be temporary to get under the APRA speed limits. Now we are almost at the end of the reporting cycle ( June 30) we are seeing LVR's adjust back to pre APRA levels.

But as I have also predicted previously, the more important changes, which have had a far greater impact on borrowing capacity ie sensitised assessment rates and HEM's , do not appear to be changing/reverting back to pre APRA policies.

 

And it didnt take long.... STG has entered the 2 and 3 year fixed rate game. The banks are all anxious to fill up their June thresholds , it would appear......

Watch this space...the fixed rate pricing war has begun... Who will be next????

Now, if only they would offer some real improvements to their assessment rates and reductions to their HEM's... we'd really be onto something !!! Alas, I dont that happening.... but this is nevertheless a good time to be taking advantage ( excuse the pun) of these deals and hammering down some debt .....

 

random question, do some lenders use a lower assessment rate for loans which are fixed for 3+ years?

 

Not anymore. Rams and st George/bom used to.

 

Put out an alert when NAB join in the sub 4% IO Fix club.