Home Loans

[TAB_DR]

Looking at shopping round my existing home loan for a better deal.

I don't know much about non bank lenders or anyone outside of the major banks and im unsure if there are any risks attached to going with a smaller company.

If they have better deals then why aren't people flocking to use them?
Instead of staying with the major players.

If anyone has any helpful advice it would be much appreciated.

If there this has been talked about before could you please point use to the right threads.

Thanks in advance
Dave

 

[Jamie M]

I'm not sure what your motivation is for shopping but if it's because of the recent rate increases outside the RBA - it's not just the big 4 who have gone down that path.

Not only do you need to work out whether the external product is suitable for you. You'll also need to look at the costs of leaving (possible deferred estab fees, discharge fees and govt. fees) as well as any application fees with the new lender. These costs can take quite a while to recoup if moving to a lower rate product.

If your current loan is fixed or the LVR is above 80% then an external refi is going to be costly.

At times, a call to your banks retention team with the threat of leaving can score you a discount on rate.

Cheers

Jamie

 

[Rolf Latham]

Looking at shopping round my existing home loan for a better deal.

I don't know much about non bank lenders or anyone outside of the major banks and im unsure if there are any risks attached to going with a smaller company.

If they have better deals then why aren't people flocking to use them?
Instead of staying with the major players.

If anyone has any helpful advice it would be much appreciated.

If there this has been talked about before could you please point use to the right threads.

Thanks in advance
Dave

Hi Dave

there are a BUNCH of second tier and non banks, that between them make up 20 % or so of the mortgage market

People have long memories and dont yet quite trust the non -bank market as they did pre GFC when Rams Aussie Wizard and Macq Bank were the flavour of the time.

The the GFC came along and caused some big cost increases, and when combined with the sometimes steep exit costs, folks were locked into mortgages that were quite painful.

Structurally, and legislatively thats unlikely to happen again to the same extent.

Lenders that cut margihs to the bone simply cant provide the same level of service or product mix

A good example is UBANK doing deposits at 6.04% and lendiing for mortgages at 6.14..................

You have to ask, is that sensible or sustainable

Back to you for a minute, and your needs, do you know what sort of product you want ( or need) and why ?

t
arolf

ta
rolf

 

[Aaron_C]

Honestly you are wasting your time if you're just chasing interest rate...it is best to stick with something that suits your needs rather than suits the headline interest rate figure.

 

[TAB_DR]

Thanks for the reply guys.

Im not wanting to change because of the interest rise last week,

We have been going over all our expenses and trying to find better deals for all of them. So far we have saved $100 pw just looking for better deals on all or bills.

We haven't had our loan long only 3.5 years and when we got it we didn't do any research at all.

We went into our bank and applied for the loan and the guy at the bank told us which loan to get and that was about it.

Now we have been going over everything i just want to make sure we have got the best deal for us to try and save a bit more.

We currently owe 300k and our house was valued at 430k mid last year.

I really don't know what i should be looking for and what would best suit us.

Not sure if any of that helps much.

ill give the bank a call and see what they say. We are also getting someone to come out and go thru everything with us.

Is there any question I should be asking, to see if its the right loan for us.

Thanks again
Dave

 

[Peter_Tersteeg]

For what it's worth, I've been getting emails for the last 3 days notifying me of the banks changing interest rates. ANZ got a lot of flack because they made their announcement first. The other 3 big banks followed and also drew the ire of the press.

Most of the other second tier lenders have also moved their interest rates up, but that doesn't seem to get much attention. The irony is that ANZs rise of 0.06% is one of the smallest increases.

Given you didn't get much advice on your loan last time, why don't you visit a broker instead? There's quite a few on this forum who give excellent advice.

 

[Rolf Latham]

For what it's worth, I've been getting emails for the last 3 days notifying me of the banks changing interest rates. ANZ got a lot of flack because they made their announcement first. The other 3 big banks followed and also drew the ire of the press.

that's because ANZ has chosen to go at the front of the flock this time round, and taken the headwind.

I will put a case on it that one of the other big three will take their turn and we have the next upward adjustment

thanks

Rolf

 

[Peter_Tersteeg]

that's because ANZ has chosen to go at the front of the flock this time round, and taken the headwind.

I will put a case on it that one of the other big three will take their turn and we have the next upward adjustment

Agreed, but ANZ have stated they'll make their announcement on the second Friday of the month. The other lenders only have to wait a week or so each month to allow ANZ to be the whipping boy for everyone else. It also allows them to make larger changes (up or down) after ANZ and either look not as bad, or they'll look more generous than the ANZ, depending on where rates move.

Not a good position for the ANZ, although I think they're being a bit more honest than the others.

There's been a lot of howling for ASIC to mandate the banks follow the RBA. Obviously that's not going to happen - the banks pricing is their own like most businesses.

There is a case for some regulation on lenders who use public money to fund lending however. I'd like to see the RBA mandate that if a lender uses RBA money for home loans, that they make their rate adjustments for those home loans on a particular date (the second Friday seems to work), within a specified timeframe.

Announcements would be made between 4pm and 5pm on the second Friday of the month. The press report it all the following Saturday and the result is a more balanced approach.

This would mean that lenders would make their rate moves without trying to score points off each other. Their rate adjustments would be truely independant of each other. Borrowers would be better informed because the press wouldn't be howling about one particular lender such as ANZ, which man push the borrower to a more expensive lender with a better marketing strategy.

 

[Rolf Latham]

I really don't know what i should be looking for and what would best suit us.

Is there any question I should be asking, to see if its the right loan for us.

I'd say it's probably other way around, if you've got somebody coming out to see you, I'd be expecting questions around your current needs or wants that some probing questions, that revolve around the fluffy stuff of life.......... kids, life goals, how you want to live your life, and

Obviously questions on things like investments, your risk tolerance, your attitude to money, how you feel about variable-rate fixed rates, what your knowledge like on investments generally,

Blah blah blah

But really important to get to the tools that you need to be able to make a decision based upon what product mix you really need versus what you think you need, or the bank/broker thinks you need.

The mere fact that you're here, tends to suggest you are not a ma and pa, set and forget, basic loan candidate. However, your your discussions with your advisers may reveal that to be the case.

Come back and let us know how you went, and what level or quality of advice you have received.

Thanks

Rolf