Best interest rates in the market in 2020

I think you will find that the rate you can get with the big 4 is dependent on the loan amount and the LVR you have

the greater the loan amount and lower the LVR the better the rate

it’s difficult to compare rates to your own without knowing that

I know you can get rates better than that from the big 4 for larger loan amounts

 

OO - 50% LVR
IP - 80% LVR

 

However there's not too much further rates can realistically fall at this point...

 

Could be worse I fixed a couple at 4.59% IO INV 2.5 years ago with Westpac. I’m looking forward to those 2 coming off in the next few months.

I also fixed a stack of others with Westpac at 4.19% 12 months ago so another 2 years to go on those...ouch...thought i was very smart at the time as was paying 4.79% IO VAR at the time.

They way I look at it is I can afford it so just need to suck it up. It impacts my CF by a good few K’s a year but at least I can still afford to hold.

 

Agreed. Can still afford it but when re-running the figures using current rates on offer the CF is mouth watering.

I have till November this year.

Hopefully I dont get sucked in again with these tempting fixes rates.

 

What will happen when the interest rates go negative? For one will mortgage brokers still receive trail income and if not will they be looking for new business elsewhere?

Secondly if interest rates go negative does that mean we will be paid to take out a loan?

 

I don't think Australia will ever get to the point of consumers being paid to take out debt, since there will always be at least a ~2% spread between the cash rate and what retail mortgage lenders charge, and the RBA won't go down to -2%.

If the cash rate did dip in to negative territory, I'd say it's more likely that retail home loan interest rates would get very low and interest on savings accounts would go slightly negative.

 

Did you know that if you have a split where OO portion is at least 25% / INV 75% then you can get OO rates for 2.80% AMP >750k lend, <80% LVR. Fixed 2.49 3 years.....

 

So after requesting to speak to the Retention team at CBA, I received 1.83% discount on P&I Investment loans and 1.65% discount on P&I OO loans. Thanks for sharing the discount on one of the threads in this section. After the latest rate cut it means 3.3% and 2.9%

 

What's the cost to break the loans? Will the interest cover it?

 

Great result. What loan size @Anne11 ?

 

Ar

Around 1.9 mil

 

Direct or via MB?

 

Funnily enough the break costs are almost identical to the interest savings...if I was skeptical I’d think the bank may have fudged the figures to make it a lose / lose situation for me

 

Haha that's actually how the break cost calc works though right? As I understand it you pay out the difference between the interest payable on your current (higher) fixed rate and what the bank can lend that money out at current (lower) market rates, over the remainder of your fixed term. And the new interest rate you move to would be close to that current market rate, so swings and roundabouts.

 

What interest rate (P+I or IO) for PPOR are you getting with Peppers after the rate cut circa 70 lvr?

 

Thanks for posting, I just rang CBA too. Was offered 1.7% discount on PI Inv (3.68%), 1.7% on IO investment (3.94%) and 1.54% on IO OO (3.75%). Rates above don't include reduction on 24march.

This on about $600k borrowings so I think not too bad considering the diff in Loma size.
Cheers

 

I think some may have short memories about original decision to fix at that particular moment. The market and choices people had were different then.

Not too long ago, in mid 2017, there was a huge crackdown on INV IO loans. Some major banks literally stopped anything other than standard discounts (i.e. 0.60-0.80% off package rates, instead of 1.5-2% discounts we see today). This created a very large spread between INV VARIABLE IO and INV Fixed IO. In these cases, fixing often made sense. I.e. fixing at 4.19% vs variable rates at near or above 5% was a common choice borrowers had in front of them.

This current lending market is offering scope to bring forward some of those expiries too, with a lot of lender offers providing large rebates that can go a long way to covering break fees (e.g. Westpac with 3k per property rebates).

 

Spot on well said.

Do you know if there is anyway to minimise break fees when not refinancing to a new lender?

For example is it worth threatening breaking with Westpac and moving to NAB (as I believe they are offering cash incentive) if Westpac don’t reduce break fees for me...might sound stupid but I’m stuck with Westpac from a servicing perspective.