Switching Lender to...The Same Lender?

Discussion in 'Loans & Mortgage Brokers' started by itsmescottyc, 14th Oct, 2019.

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  1. itsmescottyc

    itsmescottyc Well-Known Member

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    Hi All

    I'm currently refinancing from one of the bigger banks (not big 4) to an online lender. I will save approx 0.50% on current PPOR interest rate.

    Upon receipt of the final documentation, it would appear that the online lender uses my current bank to secure their loans.

    My next step was to speak to my current lender to see if they can match the improved rate, but it sort of seems like they'll be competing with themselves? It seems crazy to discharge the loan, pay a fee etc just to end up with a lower rate with the same bank.

    Would appreciate any thoughts re: best course of action. Thanks!
     
  2. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    U Bank ?

    Comparing the bank and its online cheapie is like calling Qantas wanting to fly business and quoting a Virgin fare. Some ways they save $$ are 100% online, no offsets, no broker fees are paid etc. I havent seen how they are at shifting rates up like some other lenders do - except for the recent rate reduction the majors all passed on only about half of.
     
  3. itsmescottyc

    itsmescottyc Well-Known Member

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  4. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Same same.

    I called Youi to work out why they are cheaper as seen on TV. If I want to drop my pants and take market value of course they are cheaper. Their ads compare market value quotes with other insurers agreed value. I read that from ACCC complaints about similar ads.
     
  5. itsmescottyc

    itsmescottyc Well-Known Member

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    So better to just go with the online cheapie instead of trying to convince the bank to match it? Seems pointless for them to discharge the loan, that's all.
     
    Cia likes this.
  6. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    I would call your current bank first. They won't match it - but they are likely to drop your current rate. You can then decide whether or not to continue with the refi.

    We always price existing loans before recommending a refinance. There's no point doing all the hard work - getting to settlement and then finding out that the current lender will match or reduce the current rate.

    Cheers

    Jamie
     
  7. itsmescottyc

    itsmescottyc Well-Known Member

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    Thanks. Would you conveniently leave out that they are also the lender I am looking to refinance with?
     
  8. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    I don’t think it matters. You can always leave that out though.
     
  9. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Why not tell them what their competition is? Banks do know what competitors are offering, but if they think you're not aware of it, then there's no incentive for them to try to match it.
     
  10. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Often but not always, warehouse funded product is Not the same as the retail.

    Rare exception is adealide bank.

    U bank and nab for eg are diff animals

    U bank is redraw only, your money becomes theirkney and there is no 250 k gov guarantee on your cash as there is with nab.

    Loans ain't loans

    Ta

    Rolf
     
  11. Diana84

    Diana84 Member

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    Not quite true.

    From the Govt Guarantee scheme website

    UBank operates under NAB's banking license and uses its balance sheet, risk management and technology infrastructure. UBank also participates in the Australian government's deposit guarantee scheme
     
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  12. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    You might not quite be reading this in the right context.

    UBank has deposit accounts which would be covered under the deposit guarantee scheme. They don't have offset accounts, redraw is not covered under the scheme.
     
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  13. Archaon

    Archaon Well-Known Member

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    On that same vein, I don't think redraws would be covered with any of the majors though would it?
     
  14. tobe

    tobe Well-Known Member

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    Correct. Offset is. Ubank don’t have offset.
     
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  15. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Yes. Money in redraw with any lender doesn't have the protections. Offset accounts are effectively deposit accounts so they are covered. UBank's savings account isn't an offset account.

    The saving grace of the redraw facility is if the money is taken for some reason, you owe less on the loan. Whilst this might mess up some of your future plans, they're not exactly stealing your money.
     
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  16. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    This goes to the heart of the problem with banking competition right now. Online only brands funded by majors, opaque pricing, back book repricing. Imagine if lenders were not allowed to offer cheaper rates to new customers when compared to existing ones. Would that be a good or bad consumer outcome? Discuss.
     
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  17. Lindsay_W

    Lindsay_W Well-Known Member

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    I believe there's some debate about what exactly is defined as a good (or bad) consumer outcome.
     

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