Westpac discount on home loan

We just signed the documents for the loan on our PPOR purchase today with our Westpac business manager.

I went directly with the business banking manager as he also handles our business debt (I've been a partner in a professional services firm for 12 months so we don't have the tax return history to satisfy other banks).

When we were going through the process for the application i asked about the interest rates and he said I would receive a 0.90% discount on the SVR, but when I said I am currently receiving a 1.45% discount on my existing loans with CBA he said he would look into it and come back to me.

Now the loan documentation has been prepared and the discount has remained at 0.90% which will result in a SVR of 4.28% as of today, reducing to 4.08% after yesterdays interest rate cut.

He said that is the best rate they can do as that is the set discount for the loan size.

Given he is a business banking manager, he wouldn't be dealing with home loans all the time. What are my options. I've already asked him twice. If I wait a few months could I call their call centre and ask for a bigger discount? (I have some existing debt with CBA that will be at a lower interest rate to compare to) or will the call centre see that my loan is managed by a business banking manager and defer the question back to him (which I know I won't have any success with).

Any help appreciated. My total borrowing with Westpac will be $1m in PPOR and Investment property debt plus $740k business lending.

Ben

 

Westpac is regularly offering a discount of about 1.5% off the standard variable rate, as are the other major banks. In some cases I've seen significantly larger discounts.

0.9% is laughable for the scenario described.

 

I seem to remember than when I asked about my St George discount (same bank) of 1.4% recently in the "best interest rates in the market" (or something vaguely similar) thread, I was told that up to 1.6% might be achievable for my size loans ($1.4m), so 0.9% seems pretty bad.

 

If the loan is <$150k I could see this being the case.

 

Have you done a deal with the devil and x-coll your PPOR to get the business loan?

 

Without knowing the loan amount, LVR, P&I or Interest Only repayments & product type (eg. premier advantage package) it's hard to say if this is a good rate or not
Did you speak to a Mortgage Broker prior to going to Westpac direct?

 

quickly move your business banking to another bank. You should not have loans with the same bank that does your business banking for contractual and practical reasons

 

I'm reading this as a full doc, sub 80% LVR loan. The business banker appears to have done some wrangling to get this through on 12 months self-employment, but I can see scenarios where this would work. Assuming it's the Premier Advantage Package, I can't see why they shouldn't do better on the discount.

Perhaps a solution is to accept the loan, then get the loan repriced. I'd want to know a bit more before acting on this however.

Some very permanent points have been raised by Brady & Terry. I wouldn't refinance loans from another lender to consolidate them with my business financials. In fact I think it's best to keep personal lending and business lending completely separate. I avoid putting the two with the same bank if I can help it.

 

The business loan is secured by a letter of awareness by the other partners in the business. I have 5 years to repay enough PPOR and other debt to take on the security myself.

The reason why I got the PPOR loan with Westpac was purely because I didn't have the history to provide evidence of my income to other lenders, but Westpac have been the bankers for the business for a very long time so understand it.

 

Wow! This doesn't sound good.

 

Haha aint that the truth, I don't even let my clients get fully managed by the BBs

I find they're always taking too much security, most of the time have the clients by the b@lls when not necessary.

Each of my deals that land with the BBs are with cash outs already completed, with acknowledgement of only securing against the commercial.

 

Given that today is 3/7/19 and you state been a partner for 12 months.

Why do you think you couldn't get finance elsewhere? Who told you that?

 

But I wonder if the borrower has thought this through.

 

I got 3.69 fixed rate for 1 year @ investment P&I from Westpac, is it good? They matched ANZ bank...

 

Depends on the size.

Probably not too good considering you can get variable for much lower, also considering rates are more likely to get down in the next 12 months rather than up.