The 4% Portfolio.

With the latest RBA cut to 1.5% and banks only passing some of this on, for now. What are everyone's thoughts on getting an entire portfolio down to 4% or better? This includes a mix of both the PPOR and IP's.

Obviously rates are not the be all and end all when seeking out suitable lenders, but with this latest cut does anyone think we'll see 3.5% on OO, 3.75% on Investment with 4% on IO Investment?

 

Why would banks charge a 25 basis point premium for IO?

 

Yes its doable i think, will depend on the lenders your with, LVRs, loan amounts etc.

As an example, for CBA loans done in the last 6 months of decent loan sizes (750k+), 3.95-4% O/O and 4.12% Inv is not uncommon. That will now fall to 3.82/3.99% post rate cut.

In recent months, fixed rate options have been sub 4% for both O/O and Investment.

Getting an O/O 3.5% will likely be the online lender rates owner occupier P/I sub 80% deals no offset - some of the smaller lenders have passed on the rate cut in full for example (Bank of Sydney).

 

Quite often.

 

To maximise profits.

 

They know investors will pay the extra .25% to stay interest only so they dont damage their servicing criteria
And those on interest only who arent investors cant afford the p and i payment so have no option but to pay a bit extra on interest only

And who would change lenders for .25%?

They know how to play their cards

 

Fixed rate decreases will be followed by variable rate decreases. 0% here we come.

 

Oh dear.
That wouldn't be very pleasant.

 

ME is currently (before the rate drop) 3.84% OO and 4.04% IP IO for loans >$700,000. That with 5 years IO and unlimited cash out to 85%.

 

Gosh, that's pretty darn close.
Surely you could get a haggle on the remainder.

 

Nice

 

Wait a week or two then when fresh Fixed Rates come out.
Almost time to strike. . . .