Discounted variable rates for >$2M in borrowings

Hi there,

I am just wondering what sort of discounted variable rates people are getting once borrowings with one bank creep over the $2M mark...

Recently the lowest rate I heard on SS was a 1% discount off the NAB SVR, so currently 6.24% p.a. for about $1.5M in borrowings.

Has anyone got a lower discounted variable rate for borrowings above this amount eg. $2.5M etc...?

Thanks.
 
at 6.24 ROI would be less than 10 %.................

if you can find lower, I suspect it would only be for a little while

Unless one were a borrower of 10 mill plus the concentration risk ( and all that comes with) would be too high for the "little" advance in rate, just my view though

ta
rolf
 
Rolf, are you saying that most lenders see high volume clients as 'risk' rather than as 'huge opportunities for repeat business / interest income' ?
 
nooooooooooooooo DT

concentration risk applies to the borrower, more so than the lender, though many lenders dont like u to have too much with them either.

Its almost a whole chapter and a half of the book, banks behaving badly.

If you have all or almost all your total borrowings of 2.5 mill say with the one lender to get the extra 10 or 20pts, youd have to have rocks in your head.

Not often I make such strong statements.........................at another time in the credit cycle the faiy tale many not end, but........

If you are the average style somersoft reader and player, you will be close to the 80 % lvr, and/or close to you serviceability limit.

When u next attempt to access some cash equity for the next property the lender may say NAH.

You then say, bah, humbug, I will just refinance a property...........you the find the lender says nah, take it all to elsewhere or nothing.

Most brokers would say, GREAT, what a great opportunity to get new comm. Id say, in the current environment all those apps to get those, IPs off that ONE banks books wont work well, indeed you could stuff any chance of moving further in your investing career fr the next 12 mths, which seems the average period of "confinement" to outgrow those last CRAA enquiries.

Further, you have some financial issues, and you sell a pace and expect 300 k to tide you over for the year...........but the lender says, sorry sir, the porceeds of that sale are all ours.

Like with xcoll, most people say, ah Rolf, stop the scare mongering.... ....agreed, wont happen or be an issue to most. In many cases you will be 100 % fine. But how will u know that you arent the one that will be my next (often preventable) hard luck story.

Again this week, I have 2 people that have come to enquire about a rescue because their current lender which was once their unshakeable rock and confidante has voted them "off the island" and asked them to effectively sell EVERYTHING.

Remember you are only as good as your last repayment and your last annual review, and even with both of those in order you can still be asked to leave.

ta
rolf
 
Hi Rolf, I agree with your comments...

The only thing I would add is that, in my opinion, generally having all lending with one lender isn't a major issue as long as there's NO xcoll. There are two conditions:

1. NEVER use the same bank for business (if self-employed) and personal/invt. NEVER! Keep the two seperate so you can control the flow of information.

2. Start using other lenders when you max out discounts (or get close to it) - which is the $1.5 - $2.0m level at the moment - I think Rolf was making the same point.

Just my 2 cents.

Back onto topic - JIT - if you have 1% at NAB - take (keep) it! You won't get anything better that would be worth refi for.
 
You then say, bah, humbug, I will just refinance a property...........you the find the lender says nah, take it all to elsewhere or nothing.

...

Further, you have some financial issues, and you sell a pace and expect 300 k to tide you over for the year...........but the lender says, sorry sir, the porceeds of that sale are all ours.

rolf

Rolf,

Is this if the properties with one lender are x-colled, or even if they are with one lender but not x-colled?

Thanks.
 
Well,.......... check your NAB memorandum of mortgage...........as to who gets first bite at any money you generate from their security or other money u hold with them............

To be fair, mostly lenders wont pull the all monies on you, but as dazz pointed out in another post, it just comes down to how deep the doo doo is.

Xcoll just makes it worse...............in that you will then find it difficult tp break stock out.

ta

rolf
 
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