3 and 5 year fixed rate thread

[lizzie]

... at 46 pages long - and several years in the running - perhaps it's time we started a new thread?

http://somersoft.com/forums/showthread.php?t=73179&page=46

Economists are expecting a drop in interest rates next month - but even if they slash .5% off the rate, would the banks drop the variable to compete with this from ME Bank - 5.39% fixed for 3 years?:

http://www.membersequity.com.au/rates_and_fees/home_loans.html

 

[Rolf Latham]

... at 46 pages long - and several years in the running - perhaps it's time we started a new thread?

http://somersoft.com/forums/showthread.php?t=73179&page=46

Economists are expecting a drop in interest rates next month - but even if they slash .5% off the rate, would the banks drop the variable to compete with this from ME Bank - 5.39% fixed for 3 years?:

http://www.membersequity.com.au/rates_and_fees/home_loans.html

i believe, if the RBA drops 50, most lenders will pass on 35 or less

Cost of variable rate funds seem to not be coming down in parallel to the cash rate, which isnt surprising given that a chunk of our lending comes from OS.

ME may be a small scale, and temporary anomaly, OR it could be the coming trend woth middle term rates tumbling as local fund managers look to shore up sad bond rate rtns

ta

rolf

 

[INVSTOR]

Quote:
Originally Posted by soyabean:
Hi Rolf,
Is ME Bank good to deal with ? Do they have 100% offset account etc ?
Last time I changed bank was quite a while ago I am so lost with all the new stuff.
Thanks,
Soy.

I've been using them for 14 years - much better than the big 4. They have some new loan products out for offset that I'm not too familiar with, I have an offset that I think is discontinued now. The only thing they couldn't help me with in the past was paying interest in advance. They have often had the best rates and least fees also, and I really like that they don't have lock in fees on fixed rates.

 

[Rolf Latham]

Quote:
Originally Posted by soyabean:
Hi Rolf,
Is ME Bank good to deal with ? Do they have 100% offset account etc ?
Last time I changed bank was quite a while ago I am so lost with all the new stuff.
Thanks,
Soy.

I've been using them for 14 years - much better than the big 4. They have some new loan products out for offset that I'm not too familiar with, I have an offset that I think is discontinued now. The only thing they couldn't help me with in the past was paying interest in advance. They have often had the best rates and least fees also, and I really like that they don't have lock in fees on fixed rates.

I think ME has its pros and its negatives like all lenders

if for eg you have a 6pack of units, a serviced apartment, student accom, an SMSF loan, a high serviceability need, high concentration exposure etc etc then no ONE lender can provide all that .............and it would be foolhardy to try and make that lender do what its niche is NOT

ME traditionally have been conservative because for a longg time they were a CU.

I havent used them ( or their pre cursor) for donkeys years.

ta

rolf

 

[Peter_Tersteeg]

I met with an ME Bank rep yesterday. Generally I'm fairly impressed with what they're saying, but of course the proof will be in the pudding (keep in mind they've only come on board with brokers recently).

They're very well funded (with all the union super funds behind them) so I think there's scope for them to keep their fixed rates compeditive for a while. They've obviously got the killer fixed rates at the moment.

Their variable rates really aren't anything to get excited about. They're not bad but most lenders can do better. Nor do they negotiate at all, regardless of the amount (if anyone has a different experience, please let me know).

They also don't do interest only against owner occupied property. This could be an issue for anyone wanting to use equity in their home for investments.

Most of the policies were quite reasonable with a few really great points and a few conservative points. At least one applicant needs to be a member of a union or an industry super fund to qualify.

Overall I'd say that if you're interested in fixing they're well worth a look. If you don't want to fix, there's likely to be better options available.


My personal opnion on 3 years at 5.39% is it's probably a good deal, definitely the lowest since a very brief window of opportuinty during the GFC. Even if rates drop another 1% and then start to rise again, 5.39% would probably average out over 3 years to be very good value. Of course if rates go into a further downward spiral for years (like many first world coutries) then fixing will only dissappoint.

 

[Rolf Latham]

They have often had the best rates and least fees also, and I really like that they don't have lock in fees on fixed rates.

You mean that fixed rate guarantee to settlement is free, rather than there is no exit cost if you jump early

Important difference that folks need to know

ta
rolf

 

[Rolf Latham]

My personal opinion on 3 years at 5.39% is it's probably a good deal, definitely the lowest since a very brief window of opportuinty during the GFC. .

Its such a market leading rate that the service proposition will be sad sad sad, with the broker channel relegated behind their direct operations servicing............something to be very aware of.

Personally I reckon within one to 2 weeks they will be running 10 days plus through credit.

ta
rolf

 

[INVSTOR]

You mean that fixed rate guarantee to settlement is free, rather than there is no exit cost if you jump early

Important difference that folks need to know

ta
rolf

Yes, thanks for correcting!

Nor do they negotiate at all, regardless of the amount (if anyone has a different experience, please let me know).

They also don't do interest only against owner occupied property. This could be an issue for anyone wanting to use equity in their home for investments.

They've been good to me. (edit - actually it's been about 6 years since I've asked for any favours so my comment is irrelevant)

What do you mean by second paragraph quoted above? I discovered a few months ago that they won't do interest only on owner occupied, but I don't understand what you are saying next.

 

[mystery]

or just the tipping point of things to come ?

ta
rolf

Rolf,... I only saw this new thread after I posted on the old one ....

The wife and I discussed fixing some loans last week, but felt that we'd hold off as I read a few articles were saying that the rates should drop further due to the slowdown in the economy. Is this what you were pointing out, that you feel that there may be further cut's?

I know it's crystal ball stuff, but just your opinion would be fine.

Mystery

 

[Rolf Latham]

Rolf,... I only saw this new thread after I posted on the old one ....

The wife and I discussed fixing some loans last week, but felt that we'd hold off as I read a few articles were saying that the rates should drop further due to the slowdown in the economy. Is this what you were pointing out, that you feel that there may be further cut's?

I know it's crystal ball stuff, but just your opinion would be fine.

Mystery

dunno

it does look like the "normal economy" is broken beyind that we think and may need a fair bit of fuel to keep it going

ta

rolf

 

[Aaron_C]

All pie in the sky right now. No one knows.

 

[bdc]

They're very well funded (with all the union super funds behind them) so I think there's scope for them to keep their fixed rates compeditive for a while. They've obviously got the killer fixed rates at the moment.

That makes a lot of sense...especially when I just looked at my 12mth super statement where I had growth of 1.5%...dunno if that is a terribly managed union super fund or if the private sector super funds are doing just as poorly (diversified plan).

Though those in the 2 most cautious plans made >5% each, I imagine that those cautious plans do the bulk of their lending for longer time periods (5-10years) and that the more risky packages do the 3 years or less lending..?

 

[Rolf Latham]

That makes a lot of sense...especially when I just looked at my 12mth super statement where I had growth of 1.5%...dunno if that is a terribly managed union super fund or if the private sector super funds are doing just as poorly (diversified plan).

Though those in the 2 most cautious plans made >5% each, I imagine that those cautious plans do the bulk of their lending for longer time periods (5-10years) and that the more risky packages do the 3 years or less lending..?

Mortgage backed bonds for these guys run on the low risk side.

Many private funds haven't done well either....... a simple run to cash at call would have provided a largeish smsf with better end results.

Folks forget, but even industry funds aren't run for the members as the ideology claims.

They are run first and foremost for the employees of those funds, who are the first to have a guaranteed entitlement to the proceeds or capital of those funds, with private being no different, and secondly for government.........

We will see more and more smsf as folks finally see that our super funds are not actually for the members.

Ta

Rolf

 

[bdc]

I agree Rolf.

Anyway, didn't mean to derail the thread.

Anyone had any luck getting those from the big 4 matching or coming close to this deal from ME? Or matching some of the other benefits?

I particularly like the no cost for rate locking with ME.

 

[matto_]

Great idea lizzie. 46 pages is quite long,

and this thread obviously has some more legs/posts left.

Still in two minds about the big fixed debate. Also quite jealous of those getting the (secret) CBA additional discounts

 

[Rolf Latham]

I agree Rolf.

Anyway, didn't mean to derail the thread.

Anyone had any luck getting those from the big 4 matching or coming close to this deal from ME? Or matching some of the other benefits?

I particularly like the no cost for rate locking with ME.

The majors dont see ME as competition, rather a niche lender that has no real market power or influence.

Some lenders do offer "free" rate lock, but nothing in life is free.


ta'rolf

 

[Rolf Latham]

Homeside New rates

1 Year Standard Fixed Rate 5.69% pa
2 Year Standard Fixed Rate 5.59% pa
3 Year Standard Fixed Rate 5.64% pa



I would expect this trent to continue over the next few days, with some of the more aggressive little fellas to come in near the ME rates

ta
rolf

 

[Spectre]

Seminar today and all lenders are talking about ME.
But for some all they're doing is pushing fixed rates. Previously when they're out of the market they'd say - dont sell us on fixed rate, sell on our service.
Now its sell us on our fixed rate and the "$XXXX" cashback

 

[skater]

Sheesh! Now we've got two threads on 3 and 5 year fixed rates running at the same time. Maybe a mod can duck over to the other one and close it off?

 

[skater]

LOL! Just noticed it had been closed. Now I just feel silly.