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Discussion in 'Property Finance' started by dan2101, 8th Jul, 2015.

  1. dan2101

    dan2101 Well-Known Member

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    Hey guys,

    Looking to purchase/refinance. Had a chat with loans.com.au today and gained pre approval. I'm currently with Citibank with a rate of 4.42. Loans.com.au have offered 4.04% comparative rate (no offset) or 4.08 with an offset account. Seems really good value. Will cost about $500 in fees to start up but there are no ongoing yearly fees.

    1) Has anyone used them?
    2) Am I missing something, it seems to good to be true?

    Ask Citibank for a reduction but they said 'no we can't go any lower as we offer a 24/7 service". Personally i'd prefer to save $80 a week and only have a 9-5 service!

    Thanks

    Dan
     
  2. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    If rate is your primary concern it looks pretty good.
    But, whether they are going to be a good long term fit is another question. I'm assuming your LVR is under 80% so at least you won't be stuck with them if they end up not being that great.
     
  3. dan2101

    dan2101 Well-Known Member

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    Hey Jess,
    Yep i'll keep one loan with Citibank which will be used as my offset account so my primary concern with the other loans will simply to be obtaining the cheapest rate possible.

    Thansk
     
  4. D.T.

    D.T. Adelaide Property Manager Business Member

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    Is it a one off loan or are you an investor?
    Wouldn't go anywhere near them if the latter.
     
  5. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    If it's all about rate - then go for it.

    If you're serious about investing - then tread carefully. Lender selection is much more important than rate. Especially now with all this lovely APRA intervention.
     
    larrylarry likes this.
  6. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    What D.T. and Jamie said..
     
  7. dan2101

    dan2101 Well-Known Member

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    I'm an investor. I'm never going to own 10 properties as I do a lot of renos and re sell. I've got 3 investment properties looking to purchase 4th. If I leave one loan with Citibank so I have the offset facility I don't see what the issue is. Most bands are only doing an 80% lend (unless you want LMI) so it seems like a good option?
     
  8. TheSackedWiggle

    TheSackedWiggle Well-Known Member

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    Hi Jamie/Jess,

    Loans.com.au offers upto 88 lvr (90 deposit 2% lmi) loan at 4.12% IR (with offset and no ongoing cost),
    now compare that with big banks its a saving of 1.5k per year on a 500k loan.

    Also breakfee is just 300$ for variable loans is one decided to move to another bank.

    It looks quite good, what am I missing?
    What concerns you guys about loans.com.au in general or for IP in particular?

    I am in the same boat as dan, got a pre-approval from them.
     
  9. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    Cashout policy, interest only rollovers, development policy, long term rates.

    It's all well and good to move to another lender if you're not happy, but if above 80% LVR you're up for LMI all over again, likewise even if under 80% and want to topup above 80% LVR for investments.

    I've had a number of clients who have used loans.com.au - the common theme is that whilst a competitive rate, as soon as they have wanted to access their equity to make purchases, renovate etc they have been shut down.
     
  10. meme plecko

    meme plecko Well-Known Member

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    10 years interest only option available
     
  11. TheSackedWiggle

    TheSackedWiggle Well-Known Member

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    Hi Corey,

    They offer a 10 year IO loan with offset, so a user can withdraw from offset if they like.
     
  12. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    Already aware of that - it's more a case of being able to actively roll over said interest only periods when it comes to expiry. Likewise if you're on a tighter servicing level running at 10 yrs IO may see a servicing fail, as opposed to a 5 years with 5 year simple renewal thereafter.
     
  13. meme plecko

    meme plecko Well-Known Member

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    Hmm, I haven't had any issues, just refinanced the existing loan with them.

    It's not all good with them though,my other loan with them created a headache (or 5) just last week, property settlement got cancelled a couple of times, they were ready, then they were not ready... Difficult to get answers if something goes wrong.
     
  14. Mick C

    Mick C Well-Known Member

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    It only becomes an issue when you need something outside the box....

    Equity
    Up front val
    More loans
    etc....

    There's another lender called Auswide that's doing 3.99% Variable loan via the broker and public channel ( Still available as of today)...but having dealt with them before + having one of my current IP loans with Auswide i know their rate is super cheap ( at 3.99% your not gonna complain - life of the loan discount too- but it is a P/i loan) but their equity release process is NON existent! , Cash out capped at $80,000 in most cases. ( higher case by case...but rarely)

    So not all lenders are equal.
    but end of the day not all clients and borrowers are the same...some want to buy 6+ properties some are happy with 1 or max 2....

    Your call.
     
  15. david2015

    david2015 Member

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    What about CUA? They currently have 4.18% with offset and interest only, up to 80% LVR though.
     
  16. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Bankwest also have similar - 4.17% and you can have offset with them too. Sub 80%.
     
  17. Mick C

    Mick C Well-Known Member

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    CUA is ok with their equity + flexible income options and true offset with i/o.

    But at 4.18% you probably have a few other banks around that rate that offer something similar in policy or better...Ie Gateway 4.09% ( Poor servicing/ very strict but decent equity for the income rich ppl + allow I/O) .....CBA 4.20% for PPOR sub $500k loans ( I/o allowed / rate for PPOr only...good equity and one of the best val system) ...the list goes on.

    Interest rate should be 2nd nature for an investor, policy and PLANNING ( PLAN PLAN PLAN) the investment strategy is the most important. No point having the lowest rate and a AWESOME investment strategy when the bank is not going to support that sort of strategy.

    0.10% on a $500,000 loan = $500 a year...you probably make $500 within a blink of a eye in property investing term...i know many who would be happy to pay an extra 0.60% if the bank can lend them the fund they need today ( servicing and equity is and will always be a concern for investors).

    A typical refinance cost $700- $1,000 in total fees.

    For a PPOR loan and for ppl down grading their loans and selling up or no plans on obtain more properties aggressively in short period (1-3 years) than and only than will interest rate be the first priority.
     
    Ha Nguyen likes this.
  18. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Auswide

    3.99

    ta
    rolf
     
  19. Mick C

    Mick C Well-Known Member

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    Yea but with P/I it's doesn't compare lol. ...I rather 4.09% with Gateway and pay the 0.10% for I.O...
     
  20. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Most would

    many based on cost vs value dont care for various reasons - some make sense, others make sense only to the borrower.

    ta
    rolf