Getting a better rate

Discussion in 'Property Finance' started by holztor, 22nd Jun, 2015.

  1. holztor

    holztor Member

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    Hi all,

    Currenlty have a home loan with NAB for my PPOR. I went directly with the bank, and our banker arranged a SVR that we were happy with. On a couple of occassions the rate was confirmed for us (so I have evidence in emails).

    The bank was slow in organising things and we came to signing to loan papers only a couple of days before settlement. At this stage we got told the rate was going to be .05% more as they couldn't get the needed approvals for the discount. Since we didn't want to delay settlement, we went ahead with the higher rate. The banker did say once settled, he would go to retentions to get the extra .05% discount.

    So we are a couple of months in and the banker no longer replies to emails or phone calls. I've also tried other avenues with NAB but no one will contact me. Our loan is only around $470k, so the .05% really doesn't come to much at all, but for me it is about the principle.

    I wanted to get an idea of what is involved in switching banks so I can weigh up whether this is a real option (both due to them not honouring the rate and the poor customer service), and something worth taking further with NAB.

    Cheers.
     
  2. pinkboy

    pinkboy SS Lookerafterer

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    I'm reading this as you want to jump ship for the sake of $235pa?

    Think about how much your time this is worth chasing up? If you're getting nowhere after 10hrs of trying than you are no better off.

    *'Banks' and 'principles' are mutually exclusive.

    pinkboy
     
  3. DaveM

    DaveM KFC Buyers Agent

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    Loan discharge and refi fees will take circa 10 years to pay back if its over $235 pa
     
  4. Jess Peletier

    Jess Peletier Mortgage Broker, Perth

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    More like 5 years, but still.

    That is bad service though and I can understand it's disappointing. Especially for a PPOR - for an IP these days you'd kind of expect it.
     
  5. tizey

    tizey Member

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    To add a twist on this - what about with some lenders with different rates for different LVRs... how can you transition to the lower rate in times of market movement without changing lender?

    I've bought in December 14 (so not long ago), and done some minor cosmetic renovations that were overdue, but I'm reasonably confident that the market has moved somewhat in the area so that now I'd be sub 80% LVR and not in the 80-90% LVR rate bracket.

    Any thoughts? Or is it much like the OP - stuck with what you've got unless you change lender?
     
  6. Peter_Tersteeg

    Peter_Tersteeg Finance broker/strategist

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    You get the property revalued and if the valuation confirms the 80% or lower LVR, you request the loan to be repriced based on that.

    It does depend on the lender. NAB is fairly responsive to this in my experience whilst some other lenders aren't repricing within as much as 12 months. (CBA *cough*).
     
  7. tizey

    tizey Member

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    Thanks Peter. What kind of valuation will stack up to a lender (in this case ING)? From what I read, not the best lender in terms of equity access, but did manage to avoid LMI, so worthwhile.

    I do want to achieve the lower rate and dont mind coping a bit of a fee to do so (the reduced rate is worth about $800/year to me), but dont want to spend money getting the wrong valuation - I'd rather get it done right first time around.
     
  8. Peter_Tersteeg

    Peter_Tersteeg Finance broker/strategist

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    From a brokers point of view negotiating rates with the NAB is a matter of sending an email and waiting about a day for the response. I can't imagine it would be that much difference in house.

    If this is an investment property, they're not going to negotiate at all at this point in time.

    The costs to move away from the NAB are:
    * discharge fee $300
    * government fees $200 - $350 (depends on the state the property is in).
    * Setup costs with the new lender (likely $220 with ING).
     
  9. Peter_Tersteeg

    Peter_Tersteeg Finance broker/strategist

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    INGs upfront valuation doesn't cost anything.

    To avoid LMI with any lender the loan generally needs to be 80% LVR or lower.

    Given your loan is $470k, you'd need the valuation to be about $587,500 or more. Given the purchase appears to be recent, most likely you'll get a valuation result very close to the purchase price.

    ING isn't a great lender for accessing equity. They do require what's essentially a full application to do it, but so do lots of other lenders (including the NAB). The real problem is they've got a very conservative serviceability model, which often shuts people out of accessing future equity.
     
  10. holztor

    holztor Member

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    Thanks Peter and Jess for your responses!
     
  11. Rolf Latham

    Rolf Latham Member

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    After 33 person hrs for a 56 k top up in our office you can see why I will not write an ING loan at the front end .............................

    They are likely fine for a set and forget PPOR or IP loan, but we dont have any of them

    ta
    rolf