Fixed Interst Rate

Discussion in 'Loans & Mortgage Brokers' started by raj_27, 1st Jul, 2019.

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  1. raj_27

    raj_27 Well-Known Member

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    Can somebody help me confirm 2 year fixed interest rate for Liberty Owner Occupier with 80% LVR? Loan amount 800 k.
     
  2. Lindsay_W

    Lindsay_W Well-Known Member

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    P&I or Interest Only?
     
  3. raj_27

    raj_27 Well-Known Member

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    P&I Please
     
  4. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Star product (Swift product doesn't appear to have fixed rates):
    P&I 4.29%
    IO 4.79%

    I've found they don't really publish an easy to source rate sheet. Brokers have access to a calculator that generates quotes for Liberty.
     
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  5. Lindsay_W

    Lindsay_W Well-Known Member

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    4.29% - it's pretty high, there are are many cheaper options at 80% LVR and $800K balance, pending serviceability of course
     
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  6. raj_27

    raj_27 Well-Known Member

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    Thanks Peter
     
  7. raj_27

    raj_27 Well-Known Member

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    Thanks Lindsay. I don't have other options at the moment.
    They were at 4.16 in may now put it up to 4.29 interesting move considering RBA rate reduction.
     
    Last edited: 1st Jul, 2019
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  8. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Liberty aren't directly funded by the RBA in the same way the banks are. They're funded by other sources. This is a factor that allows them to lend significantly more than other lenders, but knowing they have a very niche market means they can charge more for doing what others can't.
     
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  9. raj_27

    raj_27 Well-Known Member

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    That makes sense for what they did with fixed rate, but they moved their veritable rate along with RBA, that's what confused me. May be PR thing
     
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  10. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Their funding is loosely related to the RBA, it's all part of the larger economy. They're also regulated by ASIC so there's still a lot of consumer protections built into their lending, but they're not under APRA's oversight (as far as I know).

    They do have some competition so there is some incentive for them to offer some rates that are reasonable, but they can price however they like.

    For example, the professional investor will get an interest only rate in the mid 6% range. Nobody else has a servicing model that extends that far. At the same time, Liberty is offering reasonably competitive rates to low LVR owner occupiers as that's a market they're trying to get into (but obviously no monopoly).

    Fixed rates can be a way of avoiding higher rates associated with riskier loans. Liberty prices their fixed rates to still maintain a high margin, but also to not entirely scare off the good risk market. It's a game of balance I guess.
     
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  11. Lindsay_W

    Lindsay_W Well-Known Member

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    Might be worth sticking with their variable rate then, RBA is expected to drop rates again in the very near future
     
  12. raj_27

    raj_27 Well-Known Member

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    I am using fixed rate as small insurance for 2 years of certainty. I also doubt they will pass next rate cut down to existing customers.
     
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  13. Lindsay_W

    Lindsay_W Well-Known Member

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    Can always fix after the fact if they don't pass the rate cut on, but up to you, sounds like you've made your mind up
     
  14. raj_27

    raj_27 Well-Known Member

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    I have final approval on the loan with 2 year fixed rate. Bit of hassle to go through assessment again before settlement. Can be done,but not sure its worth the hassle.
     
  15. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    The general market suggests that fixed rates might fall further. Hard to say if Liberty will take this path or not.
     
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  16. Lacrim

    Lacrim Well-Known Member

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    Am tempted to fix at 3.28% for 3 years with ANZ. Anyone think that's a decent deal in this environment?
     
  17. Mcube

    Mcube Well-Known Member

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    Hi @Lacrim , is the rate from ANZ for PPOR or IP?
     
  18. Lacrim

    Lacrim Well-Known Member

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    Ppor
     
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