RAMS is at it again

Just received an email saying IO loans for IP will go up by 28 points. That is over 80 points now during the last 6 months.

Time to look for a better deal probably.

 

They have a history of doing such things!

 

Everyone across the board is doing the same. The other subtle thing that is also happening is discounting of interest rates has reduced -so this means that in real terms interest rates for investors are up 1%+ than the bottom.

You won't find any similar love jumping ship to another brand - it will just result in further rate rises. Smart investors right now are balancing their portfolios and locking in their interest rates with competitive offers where possible. This is naturally dependent on the greater strategy/needs being able to accomodate fixed rates.

 

They are all doing this, been lot of talk etc here

OOs have had less, but that will come as well.

 

RAMS new interest rates effective from Friday 21 April 2017:

Variable loan type Interest rate change
Owner occupiers with principal and interest repayments No change
Owner occupiers with interest only repayments +0.10% p.a.
Investment loan with principal and interest repayments +0.18% p.a.
Investment loan with interest only repayments +0.28% p.a.
Line of credit +0.50% p.a.

 

What are your thoughts on moving to P+I? Seems to be the same thing essentially. If I keep paying the principal into the loan instead of offset I can always redraw from that account and since the loan is for an IP already all redraws will be tax deductible. What is the point of putting the cash in offset then?

 

Because when you're offsetting and doing that you will have more available - because you don't have the 'principal' amount.

 

My bad. Just realised principal is not available to redraw.

 

If you are paying the minimum repayment for P+I, I assume you would have too apply for a top up as you can only redraw excess repayments. The benefit of offset is so you can withdraw money for personal use. If you redraw and it's not for investment purposes it won't be tax deductible.

 

Lucky my RAMS loans are fixed for 2 years at 4.24% Locked in the hikers a while ago

 

Redraws will only be deductible if the use of the money relates to the generation of income.

 

Nah, you have it all wrong, 3 points...

But there is nothing wrong with paying loans down, def better if your not actively growing.

 

If I recall correctly, during the gfc when all the majors dropped rates, rams was one of the few that did and kept their rates at 8% or so

 

Which is why Basel 4 is going to require 12 month bonds .... thats going to raise rates another 30 bpts or more.... Add US Fed increase---- another 50 bpts ..... Just another reason why everyone needs to fix their I/O rates and start working on debt reduction.

 

I'm glad someone else has locked theirs in, too (a lot of people seem to just be sticking with the variable rates, and hoping for the best). I was beginning to second-guess my decision.

I managed to lock one in for 3 years, IO, at 3.84% (which I was pretty chuffed about). The other one for 5 years, IO, at 4.49% - not as good as the first one, but with the current uncertainty, and everything moving upwards, I still thought it was a pretty good deal (and it was lower than the variable IO rate anyway, so I figure that I'm still in front).

 

they were the first to raise rates 6 months ago when no one was doing it. now they are doing it again along with everyone. thats double dipping

 

AFAIK RAMS follow WBC's increases?