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Mortgage broker qouted me 5.25%

Discussion in 'Property Finance' started by Darlinghurst Boy, 8th Feb, 2016.

  1. Darlinghurst Boy

    Darlinghurst Boy Well-Known Member

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    Rang a big company ... Told them i wanted to borrow 100k for a IP.

    Qoute came back at 5.25% interest !

    Isnt that a bit high ?
     
  2. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Not necessarily if that's all the lending you have with them - there's not much room for negotiation on such a small loan amount.
     
    Last edited: 8th Feb, 2016
  3. teetotal

    teetotal Well-Known Member

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    BOQ is currently offering better rates than that for IPs.
     
  4. neK

    neK Well-Known Member

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    Can you blame them?
    They probably gave you the standard rate in hopes that you would go away ;)
     
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  5. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    $100k really isn't much, but you can almost certainly do better than that. It is somewhat dependant on LVR as well, but 5.25% is too high.
     
  6. York

    York Finance Broker Business Member

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    What kind of IP are you buying with 100k?
     
  7. Jason Tyrrell

    Jason Tyrrell Well-Known Member

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    It is high...even for the small loan amount.
    I assume the LVR is below 80% given the relatively small borrowing?
     
  8. euro73

    euro73 Well-Known Member Business Member

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    Your lender choice should never be based on rate alone, unless you are in a position where you have almost unlimited equity and income.

    You need to account for future needs. ie sensible policies RE equity release/cash out, Interest Only, servicing, etc...

    It's not possible to anticipate every possible future requirement, but you can at least take a 3-5 year view and try not to snooker yourself :)

    Having said that, 5.25% seems pricey
     
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  9. neK

    neK Well-Known Member

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    The kind that is under a bridge :p
     
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  10. Redom

    Redom Mortgage Broker Business Member

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    There are often higher rates that apply for smaller loan size (e.g. it could be NAB at 90% for that loan size would be 100k, a 5.25% rate applies for investment loans without much room for negotiation). When required for servicing, you may end up paying a bit of a premium that doesn't give you much wiggle room. Perhaps explore your options, you may be able to do better - the benchmark is quite low!
     
  11. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    It's a bit high - but as others have mentioned, it's a relatively small loan so lenders won't be pricing sharply on it.

    Some smaller/second tier guys may serve you best if rate is of primary importance.

    Cheers

    Jamie
     
  12. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    $100k isn't an amount lenders are going to negotiate on, but most lenders do have basic products without the bells and whistles that are cheaper.