Macq Bank vs Commbank

Does anyone here have a home loan with Macquarie Bank, specifically their new Qantas points product:

http://www.macquarie.com.au/mgl/au/personal/loans/home-loans/offset-account-flyer

We had a valuation on our PPOR through Commbank and Macquarie and there was only 20k difference in the 2, which leaves us to choose between the 2 lenders. We'll be refinancing our PPOR home loan (450k) and releasing approx 250k equity to buy some IP's. Macq's rate is 4.89% variable (<70% LVR) and I'm hoping Commbank will meet us there. Macq's Qantas points deal is winning us over so far and the fact they came back with a 20k higher valuation. Thefore I just wanted to gauge some feedback if anyone uses Macquarie, and how their online banking/banking apps are.

Cheers,
Vince
 
They really do have very different offerings. At certain price points and LVRs one is going to be more cost effective than the other. Their extended products and services suit different circumstances and needs. I wouldn't say that one is better or worse than the other.

And yeah, their Qantas FF program simply isn't worth the cost. Not even close.
 
Id go back to basics

Whats the end game ? If its just a set and forget home loan then its simpler

If you are looking to build a large portfolio over time, CBA is a better choice now, and leave Big Mac till later, when you really need them

Further complications in choice come into the game if you are looking to put in place a proper debt recycle and debt management strategy as well, since you may need a specific loan product for this

ta
rolf
 
Just to play a bit of devils advocate….

What do you do in 6 months time if you do an upfront valuation with both Mac and CBA and the CBA one comes out on top?

The problem you have with refinance is that it costs money and I don't know if its worth refinancing for $20k however if you need the equity today then thats a different story. If not then consider staying with CBA and crossing this bidge when you desperately need the equity.
 
Have a Maq loan - we did the sums on the FF. No surprises that there was no free lunch. Wish I had of come across Pete's thread - would have saved me some time.
 
Peter knocked the FF product out of the park previously:

http://somersoft.com/forums/showpost.php?p=1086579&postcount=3

Thanks CJay, great read. The numbers don't lie I guess.

And yeah, their Qantas FF program simply isn't worth the cost. Not even close.

Cheers. I guess their fancy website and calculator got me. Macquarie offering 4.89% whilst Commbank giving 0.9% off their variable which is 5.1% (still need to speak to someone there for a further discount if applicable)

Id go back to basics

Whats the end game ? If its just a set and forget home loan then its simpler

If you are looking to build a large portfolio over time, CBA is a better choice now, and leave Big Mac till later, when you really need them

Further complications in choice come into the game if you are looking to put in place a proper debt recycle and debt management strategy as well, since you may need a specific loan product for this

ta
rolf

Thanks Rolf. The plan is to begin a large portfolio, therefore I envisage even refinancing our PPOR in the near future possibly. Kind've just answered my own post re: qantas points right? I think having the offset on the PPOR with all wages/rent going into that is the plan, then a CC for bills with the CC being paid end of month (suppose I can rely on the CC for points if the wife really insists on it)

The problem you have with refinance is that it costs money and I don't know if its worth refinancing for $20k however if you need the equity today then thats a different story. If not then consider staying with CBA and crossing this bidge when you desperately need the equity.

Currently with Advantedge on 4.98% so looking to move after getting the 2x valuations. CBA was a desktop valuation at $900k, Macquarie did an actual walkthrough (asked questions, photos etc) - $920k. We can get CBA back out for a walkthrough, however if it comes back lower than $900k then we have to take the new figure.

Have a Maq loan - we did the sums on the FF. No surprises that there was no free lunch. Wish I had of come across Pete's thread - would have saved me some time.

Damn. Guess the FF isn't as polished as it looks. Cheers Chaos.
 
Macquarie offering 4.89% whilst Commbank giving 0.9% off their variable which is 5.1% (still need to speak to someone there for a further discount if applicable)

CBA SVR is 5.9% so discount of 0.90% means your rate would be 5%

What is the total borrowing amount and what LVR? I would be surprised if CBA couldnt match or get below 5%

CBA has been pushing well above the standard below counter offers at the moment, believe this will continue to at least the EOFY.
 
What is the total borrowing amount and what LVR

Our LVR is 47% (920k val on 485k loan). We're looking to release some of the remaining 33% (approx 200k) to fund IP deposits, fees, costs etc. Taking the FF points out of the equation, Macq is at 4.89% vs CBA at 5% as you've stated. If CBA can match Macq, I'd be more comfortable going with CBA. I know it's not always the rate at the end of the day, and talking about a 0.11% diff is 1 or 2 less coffees per week.
 
Our LVR is 47% (920k val on 485k loan). We're looking to release some of the remaining 33% (approx 200k) to fund IP deposits, fees, costs etc. Taking the FF points out of the equation, Macq is at 4.89% vs CBA at 5% as you've stated. If CBA can match Macq, I'd be more comfortable going with CBA. I know it's not always the rate at the end of the day, and talking about a 0.11% diff is 1 or 2 less coffees per week.

If it was me I would be taking the full amount up to 80%, doesn't mean you have to use it but it's there. Always easier to get money when you don't need it. Loans can be switched and split very easily with CBA... but valuations dont always come back as planned.

0.90% is the standard under table offer for $500-750k with CBA. I would be looking to borrow 80% and asking for a 1% discount to bring the rate to 4.9% shouldn't be too big an ask :)
 
Our LVR is 47% (920k val on 485k loan). We're looking to release some of the remaining 33% (approx 200k) to fund IP deposits, fees, costs etc. Taking the FF points out of the equation, Macq is at 4.89% vs CBA at 5% as you've stated. If CBA can match Macq, I'd be more comfortable going with CBA. I know it's not always the rate at the end of the day, and talking about a 0.11% diff is 1 or 2 less coffees per week.

Forget the 0.11 , i don't care if they 1.11 different. Do you realise what you're doing by using banks in the wrong order? You said yourself that you plan to make a large portfolio. Once you take out this loan and buy the IP you have your eye on - what happens for the property after that? Do you know what your loan calcs will look like for that loan? Who will accept you then?

Its a bit like chess, you've gotta think a few moves ahead. Not using CBA while they're available to you is a mistake. They'll turn you down in a few properties time.
 
If it was me I would be taking the full amount up to 80%, doesn't mean you have to use it but it's there. Always easier to get money when you don't need it. Loans can be switched and split very easily with CBA... but valuations dont always come back as planned.

0.90% is the standard under table offer for $500-750k with CBA. I would be looking to borrow 80% and asking for a 1% discount to bring the rate to 4.9% shouldn't be too big an ask :)

So if I'm following correctly, taking out the 80% on CBA's $900k valuation will leave me with $720k (within the 0.9% discount), however I was under the impression that my PPOR loan ($485k) would remain standaone and a new loan of 215k would be created to fund the IP's. Once those IP experience some CG and are revalued, I would then refinance the IP# loans and payout some/all of the 215k, thus releasing security of my PPOR on the IP's, correct? If your comment to "switching/splitting very easiliy" is the solution to this 485k/215k structure, then ignore what I just said.

Forget the 0.11 , i don't care if they 1.11 different. Do you realise what you're doing by using banks in the wrong order? You said yourself that you plan to make a large portfolio. Once you take out this loan and buy the IP you have your eye on - what happens for the property after that? Do you know what your loan calcs will look like for that loan? Who will accept you then?

Its a bit like chess, you've gotta think a few moves ahead. Not using CBA while they're available to you is a mistake. They'll turn you down in a few properties time.

Thanks DT. TBH I hadn't thought of banks in that way and didn;t know Macq well in terms of structuring etc.. it was primarily the marketing FF points gimmick and lower advertised rate that got me. I've had saving/CC accounts with CBA my entire life, never home loans.
 
With Your loan amount and LVR you should be able to get 1% off with CBA if a pricing request is applied..making the rate 4.90%.

Regarding Macq one' without the FF point the rate would be 4.84% ( Standard) or lower if a pricing request is requested.
 
Peter knocked the FF product out of the park previously:

http://somersoft.com/forums/showpost.php?p=1086579&postcount=3

I'm pretty sure this is wrong.

The extra interest on $150K is $75 per year.

In one year of the mortgage, you earn 12,000 points = ~ $120.

When you factor in the additional bonus points on signing up, and the 50,000 in anniversary points earned after 5 years, it is actually a pretty good deal. Not amazing, but pretty good.

The points certainly pay for the additional interest, provided you use your points efficiently.
 
Have a Maq loan - we did the sums on the FF. No surprises that there was no free lunch. Wish I had of come across Pete's thread - would have saved me some time.

The sums DO stack up on the FF. I'll spell it out here.

$150K loan, held for 5 years, provides the following bonus points:

15,000 on sign up
12,000 per year
25,000 at 3rd and 5th anniversaries.

So at best, for a 5 year loan of exactly $150K, you earn 125,000 points for a total interest cost of $75x5 = $375. 125,000 points is worth about $1,250 if you spend it most efficiently (as already noted, 1 point is worth about 1c). So $1,250 for a total interest cost of $375.

$500K loan, held for 5 years provides the following:

50,000 on sign up
12,000 per year
25,000 at 3rd and 5th anniversaries.

= 160,000 points, or $1,600 for a total interest cost of $1,250.
 
Like most of these sorts of programs, there is a free lunch, if you can work out how to optimise it. But the vast majority of people don't, and end up subsidising the people who do. And the rest is profit for the company :)

In the end, I chose not to get into this program however, simply because I don't have frequent flyers at all and couldnt' be bothered signing up. Incidentally, now I do, so I would probably change my mind going forward.

It is also worth noting that the optimal time frame is 5 years, after which it is worth opting out unless you have a low loan balance. If we again assume 1c/point, the 12,000 points you earn per year is only breaking even if you are paying less than an additional $120 interest - which works out to be a mortgage of $240K.

Other things this doesn't factor iin is that if you're interest is tax deductible, it is worth it at a higher mortgage value. Also, once you're mortgage is below $150K you can't get the points anymore, so you need to keep it above this.

Finally, the reason I didn't choose it is I believe once you are in the program you can't opt out, which limits your ability to game the system.
 
The Macq FF home loan does work if used correctly - given that you use the FF points for flight rather than cash/gift cards as well etc....

Personally i like it for my Investment properties; the extra 0.05% is tax deductible + i get a free flight pretty much on settlement and another free flight after the 3rd year etc :p
 
BLTN I stand corrected. I clearly took the annual cost as a monthly cost. Very silly of me.

Based on this, it looks like a loan of about $240k - $300k would be the break even point on the monthly points, the bonus would be in the sign up and the 3 & 5 year anniversary points.

It's still only worth a few hundred dollars and a lot of people would still be behind in the long term, but it's nice to get a freebee now and then.

That said, I wouldn't recommend a lender on the basis of FF points. A 0.1% difference in rate is worth considering but the long term strategy is far more important.

All that said, I earn way more points every year on my credit card and I still never get round to a free flight or even lunch in the Qantas club.
 
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