Is Ubank any good?

Hi,

We are borrowing currently $500K with ANZ (for an ip) and are thinking about switching. Anything to watch out for with Ubank? We are currently on a rate of 4.98% variable with their breakfree package. 1st year annual fee is free but kicks in year 2 and beyond. We have an offset account.

Ubank are offering currently 4.87% less a 0.33% credit discount for the life of the loan. This brings it to 4.54% at the current rate with no annual fees for the life of the loan but no offset account.

Offset account has no use for me, we are more for the money saving part than flexibility. I'm more no frills and to be quite honest I cannot see why I should pay annual fees or extra interest rates to help pay for ANZ staff and their office rents...

By simple calcs, if we switch to Ubank we would save $5K to $7K with current rates....it looks like a no brainer, but is there anything I should really look out for and traps?

Thanks!
 
If it's set and forget loan and you won't have much in redraw UBank can be a good simple option.

It's administered by Australias largest non bank lender advantage, and funded by nab

I don't like them much for loans where there will be a bunch of cash in the redraw

Read their redraw conditions on their t&c and u will see my concern

Ta

Rolf
 
If it's set and forget loan and you won't have much in redraw UBank can be a good simple option.

It's administered by Australias largest non bank lender advantage, and funded by nab

I don't like them much for loans where there will be a bunch of cash in the redraw

Read their redraw conditions on their t&c and u will see my concern

Ta

Rolf

Thanks for pointing out the concern, being a relative newbie to the investment world, we're not big investors and would like to slowly invest.

Redraw for us at this stage and perhaps into the near future is not of real concern...

We did a bit of homework on ANZ vs Ubank and we cant quite figure out why we should stay with ANZ or big 4 banks for that matter!
 
If all you want is a very cheap loan to set up and pay off over time, then UBank is probably quite suitable.

If you want to access equity for investment, aggressively save, do a whole lot of other things that investors do, then cheap rates is not necessarily the most important component.
 
Agree with Pete.

If you're happy to compromise on policy/functionality and just want to pay off this one mortgage ASAP then it might not be a bad option.

What are your longer term plans with this property?

Did you ever pay LMI on the loan against this property? If so - do you think there's a chance you'll ever need to take the loan back up above 80% lvr?

Cheers

Jamie
 
Thanks for the general advice all, really appreciated!

One silly question, if I was to say purchase a 2nd ip, could I still use the first ip as collateral despite being with ubank?

If you're happy to compromise on policy/functionality and just want to pay off this one mortgage ASAP then it might not be a bad option.

What are your longer term plans with this property?

Did you ever pay LMI on the loan against this property? If so - do you think there's a chance you'll ever need to take the loan back up above 80% lvr?

At this stage, yes, looks like we are up for the lowest rates and pay it off quickly type scenario.

I think we will hold this property for 10 or so years and see how it goes. We are not really "investors" as such, we're more buying houses as it seems safe, extended family has always invested in property...

No, we didn't pay LMI with ANZ because I think it was under a certain percentage (mortgage as a percentage of purchase price), so it was not required. Highly doubt we would take lvr back up to 80% but it's hard to say what is around the corner...

Asking a couple of friends who are in finance they all seem to conclude for the everyday, layman-no-so-big-investor, it seems ubank is suitable...
 
Thanks for the general advice all, really appreciated!

One silly question, if I was to say purchase a 2nd ip, could I still use the first ip as collateral despite being with ubank?



At this stage, yes, looks like we are up for the lowest rates and pay it off quickly type scenario.

I think we will hold this property for 10 or so years and see how it goes. We are not really "investors" as such, we're more buying houses as it seems safe, extended family has always invested in property...

No, we didn't pay LMI with ANZ because I think it was under a certain percentage (mortgage as a percentage of purchase price), so it was not required. Highly doubt we would take lvr back up to 80% but it's hard to say what is around the corner...

Asking a couple of friends who are in finance they all seem to conclude for the everyday, layman-no-so-big-investor, it seems ubank is suitable...


Given what you're looking for, it doesn't sound like a bad option. If your not going to need to cash out for the medium (foreseeable) term - you'll be saving ~1200 a year with them. If you're stuck in future, should be able to refinance and cash out down the track. Sticking with them for a few years should save you more than that.

Cheers,
Redom
 
Thanks for the general advice all, really appreciated!

One silly question, if I was to say purchase a 2nd ip, could I still use the first ip as collateral despite being with ubank?

I have limited info on Ubank (they're not on broker panels I believe), but have had clients cash out with them before. So long as you can adequately repay the loan according to Ubanks servicing calculator, it should be fine to cash out the equity gain (up to 80%) and use it as a deposit to fund your next purchase.

This is generally where Ubank/online providers lack presence with investors - the ability to cash out at higher LVRs (90%) tends to be more wieldy and difficult, then say compared to ANZ (Other investor friendly lenders).

Cheers,
Redom
 
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