Ask and you shall receive (maybe)

You should definitely move to rate city. The interest rate will be much better, they won't charge you LMI and they will probably throw in some steak knives.
But seriously, perhaps there was a reason other than rate you and your broker decided on nab 12 months ago. Remember what that was?

 

@tobe the reason was to move away from CBA and Westpac with whom I had the other loans. NAB was renowned to give a quick pre-approval and I had a savings account with them.

 

Rate's a really poor reason to refinance.

After tax the savings to property investors aren't that great.
Who's to say the new lender won't jack up their variable rates as soon as you switch? Most lenders now charge a premium for investment loans. The ones that don't will most likely start shortly.

i don't think p&i is that terrible an idea, team it up with some debt recycling, or just borrow for property expenses other than interest and your tax position might actually improve from what it is currently.

 

If you're a doctor or similar, there's lenders with cheaper rates than NAB or CBA that do LMI waivers to 90%. Serviceability also comes into it as well as other policies.

 

Yes there are - I didn't realise you had that deal. Depending what your profession is there may be other options. The costs to refi usually ends up being about $1000 assuming no rebates/cashbacks.

 

@tobe , Currently for my PPOR I have an I/O loan, and I pay surplus cash into paying down the loan, and then draw that amount to invest in shares. If I have a P/I loan and my repayments are $1800 a month, and of this $300 is reducing principal and $1500 is the interest. Is the $300 available for redraw?

 

@Peter_Tersteeg, ok I didn't know that. My PPOR and an IP is with CBA. It was a no brainer to go with CBA is for the first IP. Their rate is not as high as NAB.

 

Thanks that's good to know.

 

Check with your accountant.
I was suggesting further borrowings for things like property maintenance, rates real estate agent fees etc. Depedning on what these costs are each year your deductible debt outstanding could remain unchanged, or even grow a little, even though you are making p&i repayments.

 

@tobe, how do you borrow further from the bank. If on settlement they lend me 90% of property value, and 3 months later for council rates can I ask them to lend me another $750 and keep repeating this, every time I have cost against that property?

 

Split off a portion of your PPOR loan and use that alongside or instead of the share purchases.
Or have one or more of the IPs revalued and increase the borrowings there.

 

If you don't ask you don't get.

I apply this rule to everything, even Government suppliers, most people don't either think about it or realise that you can negotiate a better price

MTR

 

Does anyone here have experience with private bank divisions in big 4 banks? I know someone who is getting a PPOR loan atm, around $1m. Super strong servicability and asset position (cpuld get $3m loan if he wanted) but is struggling to get more than 1.1-1.2% discount. Banker acknowleged there are greater discounts out there but claims private is often a touch more expensive due to the extras they offer etc.

To be fair theyre turning a deal around this time of the year from purchase to settlement in 3 weeks with no fuss and headaches and so i can see the value in what theyre doing. My friend is going ahead with it due to ease of process and the surety of it happening (eg can go away on holiday not concerned about outcome) but i was wondering if this is the norm re rates.

Fwiw i wouldve taken the deal too and can see the appeal.

 

@sanj - would depend which lender. Not bad for ANZ but with others you could do way better.

 

Thanks @Jess Peletier,not ANZ. This bank is definitrly doing better deals for similar lending as part of its retail arm, i was just wondering if the private banking side is often more expensive or if they used the short time line as a chance to increase margins.

 

All private bank cares about is selling Wealth products which is why some lenders have the ability to price as they are making money on the wealth products.

 

True but the borrower in question has a very busy business to look after and is then flying out for nearly 2 weeks. From what i understand the entire process has taken him under an hour contact time with bank, probably under 30 mins. Already got loan docs issued so i can see the appeal. 3k a year or so in interest savings wouldve been nice but not priority.

I guess i can see why the bank can charge extra for those who need it, thanks for the feedback everyone

 

thanks @tobe , Now I see what you are saying. Is there a limit on how often you can ask your bank to revalue your property in a calendar year to draw out equity?