Citi bank 4.68% variable a good deal?

[JameZ]

Hi SSers,

I'll start by saying what a great resource this forum has been for a budding property investor such as myself, thank you all for your contributions so far!

With pleasantries out of the way, here is my question: For my first IP, I am currently on a 450k variable loan (80%) with westpac at 4.93%.
Having had a look online, I found citi bank offering a lucrative rate of 4.68%.

My ultimate strategy is to maximise my borrowing through refinances to build up my portfolio (I know a great broker will go along way to achieving that).

With that said, my question are the following
-Is the Westpac loan I am currently on a good starting step to achieving my goal? Is it a good deal in terms of %?
-I know Citi bank has a better rate, but will switching to them be a hindrance towards my ultimate goal? I heard that are a pain to deal with when it comes to refinancing.

 

[tobe]

Dont choose a lender based on rate.

Its like choosing pants based on price. great pants, but 3 sizes too small....

Citibank have a couple of great niches. they refinance ATO debt, they have an interesting way of assessing 'low doc', and they can do purchases to 85% no LMI.

I havent found their service to be too woeful with the limited number of deals I have done with them lately (2 over the past 12 months). Their servicing calculator is at the conservative end of the scale.

 

[Peter_Tersteeg]

From a pricing perspective, it's a cheap rate, no doubt.

If you're planning to build a portfolio you need to go beyond rates and consider longer term future suitability.

Citibank serviceability calculations aren't particularly generous to property investors. By taking this product you may be making a decision that might cost significant money or a lost opportunity in the future.

The best way to determine if this would be the case is to discuss your plans with a broker who understands strategic lending (most brokers don't understand this, talk to one from the forum). Take a more in depth look at how Citibank stacks up for future equity releases, not just todays transaction.

 

[Rolf Latham]

citi has niches..................



ta
rolf

 

[Corey Batt]

It's not a lender that I would recommend as a strong foundation for clients to build their investment portfolio from. A mid range lender with serviceability to support equity accesses, strong cash out policy and flexibility trumps rate any day. These are the key attributes to expand a growing portfolio.

 

[Jamie M]

My ultimate strategy is to maximise my borrowing through refinances to build up my portfolio (I know a great broker will go along way to achieving that).

Hiya

Then stick with WBC for your current IP - and don't refi to Citi.

Call WBC and tell them that you're refinancing to Citi at that rate but wanted to give them the opportunity to match before you moved across. They won't match it - but may drop it a bit.

Cheers

Jamie

 

[Redom]

Hi SSers,

I'll start by saying what a great resource this forum has been for a budding property investor such as myself, thank you all for your contributions so far!

With pleasantries out of the way, here is my question: For my first IP, I am currently on a 450k variable loan (80%) with westpac at 4.93%.
Having had a look online, I found citi bank offering a lucrative rate of 4.68%.

My ultimate strategy is to maximise my borrowing through refinances to build up my portfolio (I know a great broker will go along way to achieving that).

With that said, my question are the following
-Is the Westpac loan I am currently on a good starting step to achieving my goal? Is it a good deal in terms of %?
-I know Citi bank has a better rate, but will switching to them be a hindrance towards my ultimate goal? I heard that are a pain to deal with when it comes to refinancing.

Westpac are a good place to start.

As others have said, just throw the offer to Westpac. If they don't accept Citibank as a pricing example, tell them that ANZ will offer sub 4.8% for this deal today. I've gotten <4.8% for a similar loan size and a higher LVR (88%), and i'm sure the others here have been getting similar sized discounts. Or mentioned NAB - IMO they're the most aggressive in terms of pricing.

Citibank can be really useful to take advantage of the 85% no LMI offer or other specific niches (casual employment for one is great!).

Cheers,
Redom

 

[Deltaberry]

If it provides all the usual features, and you can park and forget it with an interest only loan, why not? Also if you register as a referrer you can get a 0.44% kick back, meaning your first year's rate is almost only 4%.

 

[MC1]

If they are a business that would be happy to sign this poster up as a "referrer" I would be staying away from Citibank

 

[Mick C]

if your looking to take out equity for your next 2-3 buy, than there's a high chance you will need to refinance out of citibank for your 2/3rd buy as citibank's servicing is very conservative.

Citibank is really only great for
- No LMi at 85%
- some credit policy niche ( Not unique to Citibank tho) ie can fund business loans using resi security @ resi rates , Loans for self employed at 70% using bas, probation.
- Decent fix rate
- Low variable rate when they do have a "promotion" so really a SET and forgot loans for non aggressive investors early on.

 

[JameZ]

Thank you all for your replies so far.

While the rate is indeed attractive, it does seem like their conservative servicing will likely be a showstopper down the line when I want to refinance. Will not be going with them.

 

[Deltaberry]

Haha that's true, I do wonder myself sometimes.

 

[Rolf Latham]

Thank you all for your replies so far.

While the rate is indeed attractive, it does seem like their conservative servicing will likely be a showstopper down the line when I want to refinance. Will not be going with them.

good to see that future planning sense prevails.

ta
rolf