Citibank 3.63% Investment

Private Bank mortgage special: 3.63%p.a. (CR 3.67%p.a.) & a $2000...

Is this for real? Citibank is offering Variable Investment IO for 3.63%, any catches?

I am paying 4% at the moment for IO Investment variable, and i thought i got a good deal already.

 

Th

This could be the first gotcha,

Benefit from a competitive rate on your residential or investment property loan, when you invest at least $250,000 with Citibank, outside of the mortgage1.

 

This is the right link

Mortgage special: 3.63%p.a. (CR 3.68%p.a.) & a $1500 gift voucher!

with $2000 rebate

Citibank Home Loan: Basic 3.63%P.a. (CR 3.68) or Mortgage Plus 3.63%P.a. (CR 4.03) - [Min 500k] + up to $2000 WW GC @ Naritas

 

Link indicates PPOR loans >$500k

 

wow .... seems like a very good deal. Is it too good to be true?

 

You need to invest $250k in a Citibank managed fund etc.

 

As stated in the thread- you have to also invest 250k minimum in their managed fund which then cross subsidies the rate. You'd want to look at the fund and work out whether the performance and fee structure makes the overall package to your benefit.

There is a lot of people taking it up - my Citibank BDM was saying to me he met his monthly volume target for bringing in new debt within 2 days of this coming onto the market. It's been up for a couple months now.

 

Does anyone have information about the performance of the Citibank managed funds? Doesn't seem to exist on the website...

 

....Read the fineprint.

$250k is a lot to invest for a minimal saving. I wouldn't take it up, unless you really like their managed fund! i'd rather invest the other $250k else where with no catches.

Cheers Ivan

 

Hi all, thanks for taking the time to check out the offer we have listed for Citibank's CitiGold investment IO loan.

We're not sure we'd agree with that analysis. Naturally, we agree that one definitely needs to read the fine print of this offer (as is the case with any financial product offering) However, the potential savings are actually extremely large for most people taking up this offer as, more often than not, they are transitioning from variable IO investment loans at ~4.7x%p.a. into a 3.73%p.a. IO investment loan. Multiply that out against multi-million dollar investment loan portfolios and the savings are clearly apparent.

Also, in terms of understanding the intended market for CitiGold, it is a private banking division of a multinational bank. Realistically, if that $250,000 was a major chunk of your portfolio, you're already not showing the signs of being an ideal candidate for this particular offer. To be clear, private banking is aimed at sophisticated investors - the ATO definition of this is a minimum of $250,000 per year annual earnings and $2.5mil net assets. There can be exceptions to this minimum guide, especially if your financial position is particularly strong at a young age (which would be a max of age 40).

If, as a potential applicant, you felt that your credit profile met those kinds of expectations in terms of net wealth and income, the doors are being opened to you in terms of priority service, access to exclusive events (for example a group of CitiGold customers were invited to meet the Chinese Premier when he came to Sydney in March) and dealing with some of the most talented people at Citibank and within our own firm. Which, to further address Ivan's comment, what price due put on access to talented and influential people?

We hope this helps guide people and if anyone was interested as a potential borrower please feel free to make an enquiry, as unlike many of the more plain vanilla lending products on the market, the best way to get familiar with this offering (which is intended as a more holistic offering than merely a loan) is likely to be over the phone or in-person.

Kind regards,

Andrew
(on behalf of the team at Naritas)

 

Hi ttn,

It would appear that two very different offers are being discussed in this thread and perhaps that is where some of the confusion in this thread is coming from.

The offer that references the 3.63%p.a. P&I loan does not require any investment in CitiGold whatsoever. At the most rudimentary level, all it requires is that the loan purpose be owner occupier for a minimum of $500,000 (which is a fairly standard loan in capital cities these days). So as far as hurdles are concerned, they are at the lower end of the spectrum.

The other offer that references the 3.73%p.a. IO loan requires $250,000 to be invested in CitiGold and, we suspect, despite its niche nature has been widely discussed on forums because the original posters got so very excited about the rate that they didn't take the time to read the basic criteria for that offer - being that it is an offer targeted at HNWI/sophisticated investors with money to invest outside of their home loan.

Speaking of CitiGold's investments, as credit advisers (as opposed to financial advisers) , we are not in a position to analyse the merits of their products. From what we've seen, a significant reason for the lack of public information on their investment products is because they can largely be created ad hoc to suit the needs of the individual investor. Why? We are not talking bog standard ETFs here, this is a section of a major global bank that is designed to handle the needs of the most fastidious investors on the planet. Typically these investors have complex tax needs in and out of their SMSF, have trusts and other legal entities that require deeper thought than merely a plain vanilla product. In other words, general banking/investment products could be thought of as sold 'off the rack' whereas this section does most of their work in a made-to-measure or bespoke fashion.

Hope this helps.

 

Their regular fixed loan rates for investors seem very very average.....
- https://www.citibank.com.au/australia/htm/residential_lending_rates.htm

 

@Dean Collins , What does that implicate for having a variable P&I loan with the citibank?

 

Should I do a 3.88% 2-year P&I fixed loan with CBA or 3.63% P&I variable loan with citibank?

 

Nothing.....as long as you are borrowing for your PPOR.

If borrowing for an IP then there would be better places to borrow from.

 

Depends....do you think rates are going up or down?

If you think rates are going up then go with CBA fixed (though personally I think 2 years fixed is too short and you should be looking for 5 years......otherwise CBA can just push up rates on you in 2 years).

 

Citibank's fixed loan rate for ppor is not as good as well..

I went for CBA, which is better regulated by government and is less risky, whereas citibank can jack up the rate of existing loan as they wish.

I just applied 2 years fixed since I don't wanna be locked in for too long time. what if I really do not like my ppor..., etc.

 

The real question is, what are their servicing calls like.

Surely they would be on brokers radars if they were much chop.

 

It was said that by Tobe one of the member in somersoft:

"The majors have a standard variable, which their basic variable, their discounted/honeymoon variable and their pro pack discounts are referenced from. When they up the rate, every product moves, as when they reduce it.

Some smaller lenders dont have the same referencing, therefore they can slice and dice each product rate individually. Old customers the rate is jacked, new ones are enticed with a great new rate."

So that is why I say CBA's loan is safer.