Assessment rates

Discussion in 'Property Experts' started by Chreee, 28th Jun, 2018.

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  1. Chreee

    Chreee Member

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    Hi all,

    With all the tighting with lending could brokers list the assessment rates of major banks please.

    My mate just put a loan application with ING and their assessment rate is 8%.

    Your input is much appreciated.
     
    Chreee, 28th Jun, 2018
    #1
  2. euro73

    euro73 Well-Known Member Business Member

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    7.2 - 7.4 is the range where the majority of lenders operate. Firstmac uses 7%. There are a small number of outliers who are higher, such as ING.

    The other side of the equation is HEM's.
     
    euro73, 29th Jun, 2018
    #2
    gerege likes this.
  3. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Most lenders use 7.25%. ING is one of the highest at 8%, this makes them one of the least generous lenders. There is a lot of other considerations in the equations, but ING do tend to be one of the most conservative lenders in the market.

    ING's fixed and variable rate combinations are amongst the most competitive in the market. They do have their niche. There's also quite a few lenders that are similarly competitive in certain circumstances with must more generous lending policy.
     
    Peter_Tersteeg, 29th Jun, 2018
    #3
  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I wonder when rates nudge up due to funding costs if this could further broaden ?? ie a 50pts rise = 7.25% + .70 = 7.95% ??
     
    Paul@PAS, 29th Jun, 2018
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  5. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Most lenders policy for determining the assessment rate reads something like, "The actual rate + 2.0%, with a minimum figure of 7.25%". The 2.0% margin can vary from one lender to another or course, as can the actual assessment rate.

    What this means is there's room for several interest rate increases before we see assessment rates increase, especially in owner occupier mortgages.

    Ironically, in many cases serviceability will actually improve if rates increase. Most lenders use the actual rate (not the assessment rate) for negative gearing add-backs, so as rates increase so will the add-back, but (to a point) not the assessment rate.
     
    Peter_Tersteeg, 29th Jun, 2018
    #5
  6. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    In the heady days of just Pre GFC assessment rates were over 10 %, but retail rates were 7 to 8

    For multiple investors, how the lender treats existing debt is much more of an issue than that lenders assessment rate.

    ta

    rolf
     
    Rolf Latham, 29th Jun, 2018
    #6
  7. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    ING is on the high side for assessment rates.

    Their servicing calc isn't ideal for investors.

    I don't mind them for owner occ/vanilla type deals (even though they did just jack up existing rates by 10bps which is super annoying) but generally a no go for investor loans.

    Cheers

    Jamie
     
    Jamie Moore, 29th Jun, 2018
    #7