Best variable interest rate???

OK, trying to make a decision, as I want to consolidate my loans.

MACQ have 3 of my loans at present. They will offer me 4.15% across the board to move my other 2 loans to them. Cost of change = $1144.

CBA have one of my other loans. They will offer me 4.15% across the board to move my other 4 loans to them. Cost of change = $2438 but they will pay $1500 of this.

UBank have 4.09% as an offer at the moment. Don't know cost of change.

I am swinging towards going with MACQ as they passed on the full 0.25% of the recent RBA cut, whereas CBA only passed on 0.2%. I would hope this would bode well for the future. The total borrowing will be around $1.5 million, all under 80% LVR.

What's anyone else's 2 cents on the above?

JB
 
Yes, Bankwest are no-one's favourites around these forums.

I refi more BW loans than anything else - funnily, they seem to be very popular with transactional brokers though.

That's because the look cheap. In the long term they tend to be quite expensive despite advertising a cheap rate.

They're a perfect example of demonstrating that a cheap rate doesn't mean a cost effective loan. BW consistently cost borrowers more than the competitors with higher rates.
 
OK, trying to make a decision, as I want to consolidate my loans.

MACQ have 3 of my loans at present. They will offer me 4.15% across the board to move my other 2 loans to them. Cost of change = $1144.

CBA have one of my other loans. They will offer me 4.15% across the board to move my other 4 loans to them. Cost of change = $2438 but they will pay $1500 of this.

UBank have 4.09% as an offer at the moment. Don't know cost of change.

I am swinging towards going with MACQ as they passed on the full 0.25% of the recent RBA cut, whereas CBA only passed on 0.2%. I would hope this would bode well for the future. The total borrowing will be around $1.5 million, all under 80% LVR.

What's anyone else's 2 cents on the above?

JB

If this is purely a rate based decision, I'd have a rethink. You could be exposing yourself to more specific lender risk than necessary - just look at Macq performance during the GFC - do you really want your whole portfolio potentially exposed to that?

(This is not a dig a Maqc specifically, just a demonstration of what can and does happen during turbulent times).

Also, Macq and CBA have very different servicing and policy so it would depend on your strategy and what you hope to achieve in the future.

You also expose yourself to the risk of x-coll by whacking everything with one lender - most of them will do it by default. Suddenly your rate saving can become the most expensive thing you ever did.
 
Thanks Jess

If this is purely a rate based decision, I'd have a rethink. You could be exposing yourself to more specific lender risk than necessary - just look at Macq performance during the GFC - do you really want your whole portfolio potentially exposed to that?

Not aware of this - can you help me understand how this might impact on me?

Also, Macq and CBA have very different servicing and policy so it would depend on your strategy and what you hope to achieve in the future.

Not planning to buy any more property currently - investing in shares as diversification policy.

You also expose yourself to the risk of x-coll by whacking everything with one lender - most of them will do it by default.

Is there anything I can do to avoid this? All the loans will be below 80% LVR.

Thanks

JB
 
OK, trying to make a decision, as I want to consolidate my loans.

MACQ have 3 of my loans at present. They will offer me 4.15% across the board to move my other 2 loans to them. Cost of change = $1144.

CBA have one of my other loans. They will offer me 4.15% across the board to move my other 4 loans to them. Cost of change = $2438 but they will pay $1500 of this.

UBank have 4.09% as an offer at the moment. Don't know cost of change.

I am swinging towards going with MACQ as they passed on the full 0.25% of the recent RBA cut, whereas CBA only passed on 0.2%. I would hope this would bode well for the future. The total borrowing will be around $1.5 million, all under 80% LVR.

What's anyone else's 2 cents on the above?

JB

1. Macq - 0.20% cut....not 0.25

2. CBA offer of 4.15% i hope you have that in writing and it has not expired yet...as CBA as of last Friday has been reducing their " outside the box" discount for investment loans...and the other banks will be following ( Bankwest and Suncorp both has already followed, my NAB BDM advised this will soon roll out as well...)

So max offer from CBA 1.00% - 1.10% for IP. for new pricing request.
PPOR much higher...

Speed is the key....
 
Thanks Jess



Not aware of this - can you help me understand how this might impact on me?

Is there anything I can do to avoid this? All the loans will be below 80% LVR.

Thanks

JB

In regard to lenders when things come unstuck, they can do all sort of crazy things - rates can go nuts, loan books get sold (and rates go even nutzer) and it can be very expensive to unwind your positions and refinance. Best to spread your risk between a few lenders if possible.

Re X-coll, best way to make sure you're not x-coll is to get a good broker to do the transaction for you. Banks mostly x-coll by default. If you do DIY, tell the lender you want all loans stand alone, and check the 'Security' section your loan documents before signing. There should only be one property listed.
 
Thanks for the info Jess. I have confirmation from MACQ that I will not be cross-collateralized. And as far as the risk of interest rates etc going nuts in another GFC, I have to play that against the financial reward of consolidating my loans.

JB
 
Yes you can. Thing is, if you walk into a bank and say "It's your lucky day - I'm bringing all my loans over to you!", they will process them all at the same time and depending on who you deal with, they may very well lump them all in together and x-coll because -

a) It's how they've been taught
b) It's heaps quicker. (1 application in total, instead of one each).

You can specifically ask for them to be separate loans but it's still no guarantee they'll not x-coll.

Just check the paperwork!
 
You can specifically ask for them to be separate loans but it's still no guarantee they'll not x-coll.

Just check the paperwork!
They can do that?

What is it that we need to look for in the paper work?

For example, if I had 3 IP and going to have them refinanced to one bank, I check that each contract is only pertaining to one address?
 
Just under where they list 'security' in your loan docs, make sure there's only one property.

They shouldn't do it, however for some it's just second nature so it always pays to check.

Mistakes get made, and they tend not to be in your favour. ;)
 
I currently have 4.13% variable with ANZ with my PPOR and my 1 IP. Loan size about 1.38M at 80% LVR.

Given the recent news with CBA/NAB etc, there is almost no point for me to refinance my home loan to other banks as there is no way the other big 4 can beat the rate I have now?

I have just over 300K sitting in my offset account of my investment loan ready to spend on property. With new policies from other banks, if I do buy IP2, should I still stick with ANZ to ensure I get the lowest rate (assume no x-coll which I don't at the moment)?
 
we have a basic macq loan - no offset. Can you pay a fee and have an offset added or is it a full reapplication? With their IR higher than others I'd like to offset that particular loan.
 
I currently have 4.13% variable with ANZ with my PPOR and my 1 IP. Loan size about 1.38M at 80% LVR.

Given the recent news with CBA/NAB etc, there is almost no point for me to refinance my home loan to other banks as there is no way the other big 4 can beat the rate I have now?

I have just over 300K sitting in my offset account of my investment loan ready to spend on property. With new policies from other banks, if I do buy IP2, should I still stick with ANZ to ensure I get the lowest rate (assume no x-coll which I don't at the moment)?

It depends on a lot more than just the rate - what are your plans moving forward? What's your serviceability like? ANZ's servicing is tight so if you want to access equity down the track you'll want to be sure they'll allow you to access it.

What's going to happen when you want to access equity from three?
 
It depends on a lot more than just the rate - what are your plans moving forward? What's your serviceability like? ANZ's servicing is tight so if you want to access equity down the track you'll want to be sure they'll allow you to access it.

What's going to happen when you want to access equity from three?

Hi Jess, you are right that ANZ servicability is tight. I have already pulled 300K out of my PPOR and is sitting in my offset. 2 months ago my ANZ broker told me that we could borrow up to $800K on top of our money in the offset. Effectively $1.1M including stamps and other costs. Not sure now though.

The only thing though is that with current environment of bank loan rationing, maybe all banks would be much more conservative?

Which banks still have the most "liberal" service capacity? I am looking at some bargains after the market has been cooled down, most likely some cashflow neutral properties in mid tier capital city locations.
 
You're right - things are changing almost daily, so making decisions right now might be unwise given that policy that is awesome today might not be tomorrow. B/c you're not at the edge of your borrowing power, you have the luxury of time :)

Banks that are still generous for the time being are Firstmac, CBA are okay, ME is okay (in that respect at least)....but NAB, Macquarie and AMP who were the really generous ones are now going to be pretty much bottom of the barrel. Except for BW. They are the very, very bottom. ;)
 
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