HSBC 3.55% variable seems impressive?

Agree....you always see great variables but over the life of the loan who cares etc better to lock in longer terms and you KNOW what you'll be paying for at least 1/4 of the loan etc

 

With respect what relevance are finding ATMs and withdrawal fees when selecting a bank for a mortgage?

 

Actually this is not quite the case. You pay a price for a locked in rate "certainty premium" and often that price is higher than long term that if you go variable.

 

If you are a borrower, the sale of your loan another party should not bother you. The terms of the loan remain the same.

 

Depends on the terms of the loan Peter. Best is to get a loan with a fixed margin added on top of an objective measure (eg reserve bank lending rate + 1%). Lenders are then contractually tied to this measure.

People should be weary of loans that reference "best lending rate". In such cases yes lenders can arguably raise at their discretion as its in essence like saying "I'll charge you whatever I feel like charging".

 

..and how many of these exist in the marketplace?

 

I have these buy from smaller overseas boutique private banks. Not sure about the big 4 in Oz. likely not as competitive.

 

In my experience (like Rolf's), the sale of your loan to someone else should scare the living daylights out of you.

 

Io?

 

The entire terms of the loan agreement need to be complied with by the buyer. Can you elaborate how clients were hard done by the sale of a loan?

 

Why?

 

@big max like Rolf I had clients with loans at RAMS, Macquarie and quite a few other lenders that had books sold to other lenders around the GFC. When rates went up, theirs went up more. When rates came down, theirs didn't budge. At the same time lenders tightened their criteria and there wasn't anywhere for these people to refinance too. Some people were stuck in absurdly expensive loans for years. I saw people who were retiring on their portfolios loose it all and end up looking for work trying to pay off debts with no assets.

Easy enough to say to use product whose rates are indexed to the RBA cash rate, but which products are these? Using foreign lenders isn't a good answer, this has a high risk exposure to currency fluctuations.

 

Im going to chirp in here and correct this comment only because I was senior BDM NSW at HSBC when the book was sold. The buyer was Firstmac for those who aren't aware , and I (and some other staff) went with the book, to Firstmac. The sale happened in 2006 - well before the GFC. And rates werent jacked up. Most HSBC clients were actually offered pretty healthy incentives to hang around... and when I left Firstmac to start my company in 2012, something approaching 80% of the HSBC book - purchased 6 years earlier ( pre GFC) was still with Firstmac
So make of that what you will.....

As for RHG / RAMS - they were caught out by the closure of the securitisation markets post GFC. Simple as that. They had almost their entire RMBS sitting at 90 and 180 day terms so they could get the cheapest possible funding - and when the securitisation markets closed - they were up the creek. Their loan arrears and asset quality was first rate - there was absolutely nothing wrong with the business itself. Its why Westpac moved so quickly , bought their books and gobbled up all their assets. Sure, their lo doc portfolio suffered post GFC - and their no doc as well. But everyones did. Name one lender who didnt suffer that fate post GFC. Lo Doc was almost made extinct post GFC at every lender in the land. No Doc was made extinct.

Macquarie was a different story... just too may other leaks to fill , and all unrelated to mortgages, but they needed money elsewhere so they pulled out of mortgages. No different to GE Money,who left Wizard high and dry so they could plug leaks elsewhere post GFC - much to Aussie Johns delight

And let's never forget that the supposedly "safe" banks , the majors- were quite happy to rig rates any chance they got post GFC. Short short memories we all seem to have. On at least half a dozen occasions they either raised rates outside RBA , or passed on less than the RBA cut. They have been ruthless in pursuing the retention of their double digit return on equity at all costs...

In the end, GFC type disasters or not - none of the banks - whether major, 2nd tier or non banks- are going out of their way to make less money from you, are they?

But as for HSBC - they were never really really committed to mortgages in Australia . Not in the way they should have been.They had purchased the NRMA loan business when they entered Australia. And they had a premium broker arm that looked after heavy hitters - $5 million + loans etc etc. But they never realy wanted to go hard at becoming a major mortgage brand here. The reasons the bosses always gave was that they wanted better ROE than mortgages offered. In Australia, they wanted to concentrate on the consumer finance space - all those Harvey Norman type consumer finance products ...

Yeah they are still around and yeah they are one of the biggest banks in the world, but if you want cheap and want to know that the funder is committed to mortgages, just go to loans.com.au ironically they are owned by Firstmac, who bought HSBC's book Otherwise, engage Rolf or Peter to assist you. Good brokers , both of them.And rate isnt everything.

 

Outstanding post.

 

Loans.com.au seem to have great buyer rates but io refinance isn't very cheap. I'm still hunting to get the best rate io offset refinance

 

For loans indexed to cash rate I use various foreign lenders that lend in AUD (so no currency risk). But I agree not necessarily easy to find or access for many people resident in Oz. Checking and understanding the key terms of a loan is key when borrowing. I have in my time had a number of occasions over the years where I have had to specifically rely on an interpretation of a clause in a loan agreement to benefit me. (Also well worth keeping a record of any pre-loan documents and advertising that banks put out regarding the loans they offer). The Trade Practices Act will be your friend in such cases. No bank wants to be publicly sued of over misleading conduct in this current climate ...

 

No, P&I only.

 

Look at AMP. Better yet, contact one of we brokers on here