Just as predicted

Flash Westpac sale on 3 year fixed I/O rates... 50bpts off their advertised rate of 4.79%.

Just as predicted , there will be flash sales from lenders as they overshoot the 30% target and find themselves with a little I/O capacity...

4.29% for 3 years is pretty good going

 

Just to confirm this being 3YR Fixed Interest Only Investment Home Loan.

Didn't clarify IHL or HL

 

The good times are back!

 

INV IO Gonna have to up your game

 

New customers only?

 

Actually, I think I prefer this style. When / if the chips are down or the loan is up, look around for a decent deal and take it back to your own bank. The crack lets the light in, as Leonard Cohen would say.
I reckon you could go from one to another ad infinitum and feel fine about it.

 

Time to go shopping. I’ll take 12 houses, and yes fries with that.

 

Just to remind readers - don't confuse improvements in I/O rates with improvements in I/O servicing. As banks who have a little capacity within their quota seek to grab a little bit of market share by having these flash sales ,servicing calcs have not improved. So be mindful that the much more critical issue of borrowing power isnt being improved by any of these flash sales.

So while it's certainly good news that the short term strategy of large I/O rate hikes combined with zero discounting, which banks employed to incentivise borrowers to move from I/O to P&I ,appear to have come to an end - the real game remains borrowing power- and that hasnt improved.

If you look at Westpac as the example, they are offering an attractive 3 year fixed rate at 4.29% but they have recently adopted stricter HEM's which makes their calc fairly average, so it's not necessarily an accessible offer for many who are at the ceiling of their borrowing power.

AMP is another example. They have also announced this week that they are accepting I/O deals again... ( including SMSF) but just like Westpac they havent made their servicing calc any more generous...

 

Yeah, I got 4.29% IO, fixed for 3 years IP loan with Suncorp a couple of weeks ago.

Already got verbal finance approval last week. Have been advised that I will get written approval today.

LVR is 80%; balance coming out of an Offset linked to another IP loan.

 

Haha all good we normally just match

 

@Brady Yep - gonna do some pricing today to test that theory

 

Just tested myself hasn't been updated in the tool yet. Will have to see if can get it match

 

Might give AMP a call now...I may not meet serviceability for an IO extension but have nothing to lose. Their IO rates are nearly as bad as their P&I so doesn't make sense to stick with P&I.

Most of my loans are with NAB - any changes with them?

 

Westpac and the dragon are doing 4.19% for INV IO 2 years fixed and 3.79% for 2 years O/O P&I. New business only but if you push hard enough you may be able to get it on existing lending.

 

I'm on sub 4s with NAB on all loans (fixed for a little more than 2 yrs left)...but some are P&I. Looks like I don't have much to gain rocking that boat if rates are similar/worse compared to what I'm paying. Will have to revisit in 2 yrs time I guess.

But I'll hit up AMP now. Any sniff of a chance of getting an IO extension with AMP if you don't meet current serviceability calcs?

 

My understanding is that it's 3YR Fixed IO IHL - which is only 0.35% being and extra 0.20%

 

No harm in speaking to their discharges team and hustling hard. It helps when you know what other lenders are offering when negotiating.

You won't be able to extend the IO term though without a full assessment - better chance of finding Waldo.

 

I take the pricing changes as a sign that lenders are back <30% new lending caps & can afford more of this business, hence the half decent pricing offers now available.

There's still a fair bit of cross subsidisation going on incentivising other products more.

Interestingly, for most, the pricing incentives don't apply to IO on OO loans.