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Rate chasing after recent APRA triggered increases

Discussion in 'Property Finance' started by Hockey Monkey, 15th Nov, 2015.

  1. Hockey Monkey

    Hockey Monkey Active Member

    Joined:
    22nd Oct, 2015
    Posts:
    37
    Location:
    Melbourne
    Interested to hear stories and recommendations after the APRA triggered increases over the past few months.

    I currently have various loans spread across BoM and CBA at 1.35% and 1.30% discount respectively on the standard variable rate. I understand this is pretty good for brand name lenders.

    With recent changes the BoM ones have increased from 4.10% to 4.25% (secured by PPOR) and CBA have increased from 4.15% to 4.57% (secured by Investment properties) over two separate increases.

    I've sat back from a little while watching other 1st and 2nd tier lenders also increase their rates, but there seem to be much better deals out there.

    For example various white label Macquarie products @3.91% (Owner Occupier) and Pepper @4.09% (Investor). This would amount to around $9K in interest savings for my current borrowings, an amount that is hard to look past.

    I am also considering lots of factors including
    - Not crossing loans
    - Offset account
    - Ability to extract equity in there future
    - LVR (happy to structure at 70% for a good rate)
    - IO preferred, but would consider PI for a good rate
    - Whether a new lender is likely to make similar future rate adjustments
    - The quality of their service / online services / apps etc.

    What are others doing / recommending? Should I just stick with my current structure, wait it out a bit longer to see what happens or keep looking for something better?
     
    Last edited: 16th Nov, 2015
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Sit

    ta

    rolf
     
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  3. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    2,143
    Location:
    Canberra and Sydney
    Wait for the dust to settle - refinancing based on pricing isn't a good idea right now.
     
  4. Richard Taylor

    Richard Taylor Mortgage Broker & Brisbane Buyers Agent

    Joined:
    20th Jun, 2015
    Posts:
    171
    Location:
    Brisbane
    As well as letting the dust settle you should reassess the features you need for each loan.

    Been seeing a lot of clients recently pay for features they just don't need.

    Cheers


    Richard
     
  5. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
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    Location:
    Melbourne, Nationwide
    Based on the rates you're paying, you're actually doing fairly well. Might be possible to get slightly better here or there, but rates could still change further so I wouldn't do anything just yet.
     
  6. tobe

    tobe Well-Known Member

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    Location:
    Melbourne
    A 9k saving is only 6k (or less) after tax, if that's any consolation? Wait it out.
     
  7. Hockey Monkey

    Hockey Monkey Active Member

    Joined:
    22nd Oct, 2015
    Posts:
    37
    Location:
    Melbourne
    Thanks for the advice folks. The taxman covering part of the increases is some consolation ;)

    Reconsidering features without switching lenders doesn't really appear to be an option. The best savings seem to be for options like PI instead of IO (with NAB or other smaller lenders) or dropping to <70% LVR resulting in a better rate for lower risk, although the main lenders don't seem to do this.

    How long are people planning on staying on the sidelines? I have another property settlement coming up around easter next year, so maybe I'll review again then.
     
  8. Marty McDonald

    Marty McDonald Mortgage broker

    Joined:
    22nd Jun, 2015
    Posts:
    228
    Location:
    Sydney North Shore and Norther beaches
    Ive heard pepper is upping their wholesale rates so assume will have ncrease direct rates also.
     
  9. Marty McDonald

    Marty McDonald Mortgage broker

    Joined:
    22nd Jun, 2015
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    Location:
    Sydney North Shore and Norther beaches
    It's hard to compare at the moment. 4.55 sounds rubbish but if investment and IO not too bad now.