Gateway Bank

Discussion in 'Loans & Mortgage Brokers' started by Sir Savien, 1st Feb, 2019.

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  1. Sir Savien

    Sir Savien Active Member

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    Hi,

    Does anyone have any experience with gateway bank? They are offering an attractive 4.17% variable investment IO loan at the moment.

    Thanks in advance!
     
  2. mikey7

    mikey7 Well-Known Member

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    Reading some of the 'reviews', they seem very.. scripted. And there's not many of them.
     
  3. Lindsay_W

    Lindsay_W Well-Known Member

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    the 4.19% is for their Variable Investment P&I loan not Interest Only - the Interest Only rate is 4.49% ie. not great but not terrible either.
     
  4. Sir Savien

    Sir Savien Active Member

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    Hi Lindsay,

    If you have a look at their page, there is a link where it says "for interest only rates, click here". The product is called Low Rate Essentials. I have also confirmed the rate of 4.17% for interest only variable by calling them directly.
     
  5. Lindsay_W

    Lindsay_W Well-Known Member

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    Apologies thought you were talking about the package product with an offset account - the basic account is just that
     
  6. Sir Savien

    Sir Savien Active Member

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    Yea it is basic but plenty of other lenders offering basic products, nowhere near this low for investment IO variable.

    I'm mainly concerned about rate rises etc.
     
    Lindsay_W likes this.
  7. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    If that's your concern, then you should consider fixing.

    A lot of lenders have funding models where 'rate creep' is quite significant. Granted it occurs with virtually every lender, but it's often a lot more aggressive with the smaller cheaper lenders.

    Today you're offered a very cheap rate, way below the market. Within a year, those rates have risen significantly due to 'funding costs'. They'll often become quite expensive fairly quickly, whilst new borrowers are still being offered the cheaper deal.

    It can be mitigated by keeping an eye on the market, but if your concern is increasing rates, the best way to negate this for a period of time is to fix (and then review when the fixed term ends).
     
  8. Lindsay_W

    Lindsay_W Well-Known Member

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    Understandable, if you don't have cash to offset the loan then the basic product might be better suited to your needs for sure.
    Also if you're worried about rate rises and don't need an offset it could be worth looking at the fixed rates on the market too, some Inv IO Fixed for 2 & 3 years currently available from 4.09% - 4.19%
     
  9. Sir Savien

    Sir Savien Active Member

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    Thanks for the reply.

    Fair enough, I have been looking at fixed too. It's just that people say variable over fixed, you can't beat the banks with their fixed rates, etc. Of course for any variable rate, if the rate is close to fixed rates, the main concern for anyone would be rate creep right? Otherwise you would definitely go variable for the flexibility.
     
  10. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Variable loans are flexible. Fixed loans offer certainty. If your concern is rising rates, then fixed give you the certainty. There are currently some lenders offering 2-3 year fixed rates that are comparable with what you're quoting.

    If you want it both ways, then go with a part fixed / part variable loan.