Best interest rates in the market in 2019

{Note from mods - this thread continues from here: Best interest rates in the market in 2018}

this was direct with Nab.
Nab choice package, $395 annual fee

 

Thanks for confirming. NAB didn’t raise their rates last year when the rest of the banks did which I guess contributes to this good 1.65% SVR discount, although they could raise 15 basis points at some point to catch up.

HSBC has me interested, would save around $3500 per year in interest.

 

That's only partly correct.... they did raise rates by 18 basis points for new borrowers....

 

I understood that subsequent increase didn’t apply to the SVR

NAB raises interest rates for new borrowers

 

Yes, that's why I said "partly correct" as NAB did have a rate rise last year but deliberately held off on the SVR, hence the SVR discount you mentioned is not due to them not raising rates per se but rather due to their targeted rate rises within their product line, excluding SVR as they wanted to re-establish confidence with current customer base. That's what I was alluding to.

 

I am currently with CBA for an OO loan with a rate of 4.02% variable and have negotiated with them a rate of 3.87% variable or if I fix for 2yrs with them, the rate would be 3.74% - this is all on the wealth package. Loan is around $500k.

Does anyone know if either rates are good or if I should be contacting my broker to try and get a better deal? Been with CBA for the past 21yrs. Reading the last few posts though the going rates seem to be around 3.55-3.6% so wondering if I should look to re-finance?

 

Hi. In the past I haven’t been able to get better rates with CBA (similar situation - banked with them a long time). I have almost a mil in loans, around 75% LVR. My OO property has two loans against it - the P&I one is at 4.02% like yours.

My other OO loan is coming off 10 years of IO. I think it has 20 years left as loan term. CommBank has said my new rate will be the SVR. I’m going to contact them to see if they will do better - any guidance?

Also if I ask to have loan term changed to 30 years (noting I don’t think they’ll allow another extension of IO but the property is likely to be an IP in the future - so would prefer to keep principal repayments down, favouring saving into offset) - will that be considered a new loan - and what break fees would be in place if I refinanced to a different bank in the future?

 

This should trigger a complete re-assessment. If allowed, may re-originate the original loan and obtain current discount rates across the board for all your debt. If your going through the process of this anyway, may be worth exploring other options too and seeing how CBA offer compares (doing a lot of legwork anyway).

 

Rolf, what does SVR stand for?

Is it worth fixing in the current market? I haven't been keeping across interest movements or rates but trying to catch up as I have 14 days to decide to accept CBA's offer or not.

 

Standard Variable Rate. It's the benchmark rate which the majors tend to advertise, then you get a discount off that. The discounting lenders use today has become a subtle way of manipulating pricing unfortunately.

Fixing is probably worthwhile. My best guess is you might or might not come out ahead, but overall you probably won't be disappointed.

 

I'd like to pick experts brains here.

Is there any catch? I spoke with Commbank regarding their Wealth Package with a $2k incentive. Setup/Discharge Fees for 2 different Mortgages (both Investment & P&I) will be shifted to the one account. Offset Account is waived for first year, $395 pa there after.

I currently have 2 rates with 2 banks:

Bank 1: 4.33% ($340K no offset)
Bank 2: 4.66% ($350K with offset but yearly fee $395 pa)

Commbank are offering 4.25% if I bring them both of 4.30% if I just move the Bank 1. Sure I am aware of bait and then increase traps but my simple thinking, I get $2,000 less $550 $1,450 net.

Thanks in advanced.

Anything else I should be aware of?

 

That's a decent deal for the CBA, but there are better deals available with the second tier lenders if you've got reasonable serviceability.

 

Is that 4.25 still p&i?

 

yes, still p&i either way i go.

Yes I thought it was a decent deal as well but wanted to pick some of your brains here for any "gotcha" clauses I should look for.

I'm the type of investor who just shops around every 2-3 years, not in to changing every year or so.

Thanks.

 

I am not sure I understand what you mean by the end rate? Do you mean the rate once I factor in the wealth package fee? I am already on the wealth package which I've had since you set me up with the loan

Should I email you the offer letter they emailed me? I know you normally tell me I should be looking at servicability as well and not just the interest rate.

Letter says they would offer me a 1.50% discount to the home load which means based on today's rate it would be 3.87% if I want to keep it variable. If I fix, they're saying they would provide me with 3.74% for 2yrs.

 

If it's IHL P&I 4.25% is a discount of 1.70% pretty much the highest discount available (I've done higher but it's not easy, system actually maxes out at 1.70% an needs to be done manually)

With CBA it's not the rate being 4.25% it's the discount you're agreeing on being 1.70%

Current SVR for IHL P&I is 5.95% looks like you're getting 1.70% discount therefore end rate 4.25%

The SVR 5.95% could change, up or down... you will still get 1.70% discount off the SVR


I don't have concern with 'bait and increase' on SVR it normally moves with the market
If you were talking the Extra Home Loan 4.24% (or 4.14%) then I would be looking closer... this is a new product, check the list of all the products no longer on offer... they usually came with a low rate at inception. Historically I've seen a lot of brokers offer these types of products, as they have a low rate, which then increases, which they then refinance elsewhere.

 

Thanks. Yep I fully understand but worded it badly as my current home loan was always what market rate was with a life of loan discount.

On the surface it seemed too good of a deal to be true. A friend had earlier (probably 3-4 weeks earlier) managed to secure 4.30% which I was going to pull the trigger on anyway but I was surprised how easily I managed to get 1.70% discount right off the bat....times must be really tough.

 

Pricing tool can change daily.