Basic variable rate loan with redraw?

A

Azza

Hi,
My fixed term PPOR loan is finishing, I have an opportunity to switch loans now...

Loan amont is about 350.000

I checked Infochoice for basic variable rate loans with redraw facility
http://news.infochoice.com.au/home-loans/basic-variable-home-loans.aspx#

What I noticed is all "cheap" loans comes with some catch - either $700 establishment fee like ING Direct, or huge exit fees (myrate), or $50 redraw fee in AMP...

I prefer not to commit to a lender, as lenders changing rules during the game all the time.
I just want a simple loan without a catch... any advice?
 
Azza said:
Hi,
My fixed term PPOR loan is finishing


I just want a simple loan without a catch... any advice?
Click to expand...


Before we head too far down the product tangent, what do u want it to do for you ?

More to the point, what will u do with the property u are in now say 5 10 or 15 years down the track ?

ta
rolf
 
The info on that site sounds out of date ing have no app fee and no deferred establishment fees now plus free redraw and no ongoing fees on most of their loans. Basic loan rate is just over 7%. Plus they will pay you $1000 if you switch and also open a savings account with them. There are plenty of good basic deals around but that one is pretty darn good IMO.
 
the information on that site is outdated. for instance amp basic variable does not have a redraw fee for internet or phone banking redraws. Look for a better site to compare home loans with :)
 
i should also add that amp basic also comes with and offset account so you could potentially save money if you have your wages and savings going in there. You have to compare loan products not just by the interest rate but also the upfront and ongoing fees.
 
jonmardell said:
the information on that site is outdated. for instance amp basic variable does not have a redraw fee for internet or phone banking redraws. Look for a better site to compare home loans with :)
Click to expand...

Again, here we go:
https://www.amp.com.au/wps/portal/a...toid=b088272277a02210VgnVCM10000083d20d0aRCRD

Click on "Rates and fees" tab, next go to "Fees and charges guide" (pdf document)
Redraw Fee $50
Payable each time we refund your advance payments from your Basic
Variable, Advantage Variable or Low Doc $10 Plan loan

Does not apply for professional pack...
 
Rolf Latham said:
Before we head too far down the product tangent, what do u want it to do for you ?

More to the point, what will u do with the property u are in now say 5 10 or 15 years down the track ?

ta
rolf
Click to expand...

Hi Rolf,

I most likely will still be living there in 5 years.
In the same time I want to keep the door open for renting it out. This makes interest only and offset account a preference...

In the same time I don't want to overpay for this feature. I've tried to rent out my PPOR 3 years ago only to find out I can't refinance it to the current value. This means little room for negative gearing and the whole thing just does not make any sense...

I've sold the house and still greteful to this forum for a very valuable advice...
 
Brett IP said:
Hi Azza

Make sure you know all the future implications of redraw 'vs' offset, they are critical!

Cheers
Click to expand...

Hi Brett,
I understand the following:

1. Offset allows me to keep the initial dept, so I can rent the place and claim neg gearing.
2. Offset is more conviniet so I don't need to move funds between accounts all the time.

I am with CBA now and their "MISA account" sucks big time, they call it "offset" but it works just as usual redraw faciliity, same incovinience.

Is there anything else I'm missing?
 
Hi AZZA

The MISA may not be convenient, but it works correctly from a tax perspective.

Your stated need is not compatible with what you actually want to achieve,

You dont want a basic after all.............

You need a 100 % offset and you would like a transactional 100 % offset account.

Id look hard at pushing CBA for a bigger discount to get the rate into the low 7s and work with the invonvenience of the MISA, unless the MISA bugs you that much that you are willing to go through the move.

Cheapest no frills workable offset from a bank at the mo looks like Adelaide Bendigo at sub 7s, but with entry and ongoings

ta
rolf
 
Azza said:
Again, here we go:
https://www.amp.com.au/wps/portal/a...toid=b088272277a02210VgnVCM10000083d20d0aRCRD

Click on "Rates and fees" tab, next go to "Fees and charges guide" (pdf document)
Redraw Fee $50
Payable each time we refund your advance payments from your Basic
Variable, Advantage Variable or Low Doc $10 Plan loan

Does not apply for professional pack...
Click to expand...

Hi Azza, read that document more carefully particularly the ** as it is free to redraw for internet and phone banking as i said!
 
Not all about rate... but that aside

Look at ABL vs AMP, both good offers, ABL is offering a discount on top of the carded rate of .15 so all up rate is 6.94%

Difference, ABL charge 695 + 10 p/m
AMP 7.09 and while no quoted fees, their solicitors still charge 545.

Splitting hairs and more likely it may be an issue of servicing in many cases (not necessarily yours Azza)
 
If you revert to variable with your current lender you will need to go and see a branch manager to get discount under package to 0.7% or 7.11% and yes the MISA is a bit lame. $350 annual fee for the package.

If you move it will be a $350 discharge fee from CBA, potential additional $700 if you have had the loan less than 4 years, titles office fees to release the existing mortgage and titles offices fees for the new mortgage. This is before any of the new lenders charges.

Say you got a loan with offset etc at 7.0%. It could take up to 4-5 years to recover the cost. By then the rates will have moved anyway.

Of course you can walk in to any bank or broker office and get 100 reasons to move. Good for them - no real financial benefit for you!
 
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