Macquarie Bank rates up 0.7%

[MPmelb]

2 of my IP's are with Macquarie Bank. I just found out the interest rates on the loans are going up 0.7% That's on top of the 0.4% last month.

Looks like I'll be refinancing. Does anybody know a good lender for fixed rates over 3 years? I did a search and Meridian Money offered the best rate at 8.19% and low fees. Has anybody heard of, or dealth with them???

I would have left Macquarie Bank a long time ago, but I've been stuck due to high exit fees. But this is the final straw. I've heard they're basically downsizing their mortgage division, so obviously they have no interest in keeping customers.

The greed of the banks is quite breathtaking, esp. when Macquarie made $1.8 billion in profits last year, and the ceo pocketed $33 million in pay.

 

[karina]

is that 0.7% in 1 rise?

thats a bit rough. can I ask if that is for low doc or full doc or are both going up the 0.7%

 

[trendsta]

this really wasnt a surprise..

there was a thread a few weeks/month ago? that said "banks to raise rates by .45 bass points" .. with reasoning why that would happen..

.45 (due to funding costs) + .25 (RBA increase) = .70 % increase

 

[MPmelb]

is that 0.7% in 1 rise?

thats a bit rough. can I ask if that is for low doc or full doc or are both going up the 0.7%

yes 0.7% in 1 rise, and 1.1% in 2 rises over 2 months.

 

[alexlee]

The greed of the banks is quite breathtaking, esp. when Macquarie made $1.8 billion in profits last year, and the ceo pocketed $33 million in pay.

So in the last couple of years when the banks (forced by competition) have been lowering their rates to below the standard variable rate through 'professional package discounts', did you send them a nice thank-you note thanking them for being generous?

Banks don't get any pleasure out of raising rates, and really don't get any pleasure out of 'helping' people buy homes, either. They are a business, borrowing and lending money. If you accuse the banks of being greedy now, you would also have to admit they were generous when they gave people lo-doc loans at full doc rates, or gave discounts to the standard variable rate (which has only been in this cycle), or to give loans to people who wouldn't have gotten a loan 20 years ago because their income couldn't be easily verified.

You get the good, you get the bad too.
Alex

 

[trendsta]

good points Alex..

Scary thing is people, corporations etc have become used this very cheap money (with negligible risk priced into the equation). And many personal investment strategies and corporate strategies are based on that fundamental premise...

That premise is no longer true, and IMHO we will not see such cheap money for a looong time ... the real consequences of all this are just starting to appear.

 

[MPmelb]

So in the last couple of years when the banks (forced by competition) have been lowering their rates to below the standard variable rate through 'professional package discounts', did you send them a nice thank-you note thanking them for being generous?

Banks don't get any pleasure out of raising rates, and really don't get any pleasure out of 'helping' people buy homes, either. They are a business, borrowing and lending money. If you accuse the banks of being greedy now, you would also have to admit they were generous when they gave people lo-doc loans at full doc rates, or gave discounts to the standard variable rate (which has only been in this cycle), or to give loans to people who wouldn't have gotten a loan 20 years ago because their income couldn't be easily verified.

You get the good, you get the bad too.
Alex

The banks were still making good profits even after factoring in 0.7% discounts, and low docs.

The point is the banks already make enough money without having to rape customers who help make them the money. It's called a degree of morality.

I suppose you will argue that morality and business profits don't mix, but when you are "considered" a pillar of a good society like banks are, then they should keep that in mind.

Anyway, If they don't want my business, I'm happy to go to a lender who will respect it.

 

[MPmelb]

good points Alex..

Scary thing is people, corporations etc have become used this very cheap money (with negligible risk priced into the equation). And many personal investment strategies and corporate strategies are based on that fundamental premise...

That premise is no longer true, and IMHO we will not see such cheap money for a looong time ... the real consequences of all this are just starting to appear.

cheap money??? look at bank profits and try to tell me they are really suffering.

 

[twobobsworth]

Funny that we hate banks for making money...which is what we are trying to do with property.

 

[Qlds007]

MPmelb

Couple of quick quick questions for you:

1) Your current loan with Mac Bank is it Nodoc or Lodoc ?
Or maybe more appropriately can it be Lodoc.

2) What loan size and LVR is it.

3) What is the interest rate you are currently being charged ?

Be happy to give you an indication of what you can expect to be paying in the market with answers to these couple of initial questions.

 

[BV]

MPmelb,

I am also on the market looking for better options
Meridian also have the AAA home loan for 8.09% for loans over $250K

http://www.meridianmoney.com.au/products/aaa-home-loans.html

Thinking of the credit squeeze I was at first a little skeptical
to switch to a small lender but seeing that Bank greed is kicking in more and more refinancing is now a consideration.

Cheers

 

[Mofra]

The greed of the banks is quite breathtaking, esp. when Macquarie made $1.8 billion in profits last year, and the ceo pocketed $33 million in pay.

... however they are making a loss on their mortgage operations which is why they are shutting it down & sacking 150+ staff.

 

[trendsta]

cheap money??? look at bank profits and try to tell me they are really suffering.

yup cheap money .. massive LVRs... no doc, or lo doc loans ..no savings/ deposits. Money that was by historic standards 'given away' ..

Banks are there to make money ..

Your statement is like renters saying to property owners "dont raise rents, look at past CG and tell me they are suffering".

 

[alexlee]

The banks were still making good profits even after factoring in 0.7% discounts, and low docs.

The point is the banks already make enough money without having to rape customers who help make them the money. It's called a degree of morality.

Companies don't have any moral obligations under the law. However, they DO have legal obligations to their shareholders to maximise profits.

I suppose you will argue that morality and business profits don't mix, but when you are "considered" a pillar of a good society like banks are, then they should keep that in mind.

What's in it for them? Do you NOT raise rents because you want to protect your karma? You do realise banks don't want to be pillars of a good society. I certainly wouldn't want to be: too many expectations.

Anyway, If they don't want my business, I'm happy to go to a lender who will respect it.

And if enough people behave like you and switch lenders, the banks will drop their rates. Assuming, of course, that ANY lender can afford to NOT increase rates.
Alex

 

[MPmelb]

MPmelb

Couple of quick quick questions for you:

1) Your current loan with Mac Bank is it Nodoc or Lodoc ?
Or maybe more appropriately can it be Lodoc.

2) What loan size and LVR is it.

3) What is the interest rate you are currently being charged ?

Be happy to give you an indication of what you can expect to be paying in the market with answers to these couple of initial questions.

1. low doc
2. 2 loans - 1 @ $120K, the other at $240K. LVR 55%
3. 9.3%

when I took out these loans 4 years ago i was self employed. Now I work on a temporary basis, hired out by a recruiter, have been the last 2 months.

thanks for your help, much appreciated.

 

[alexlee]

Funny that we hate banks for making money...which is what we are trying to do with property.

Quite. And what are we thinking when we read about 'landlords are greedy and shouldn't raise rents because renters are suffering' in the media?

My CBA shares have done very well even with this recent fall.
Alex

 

[Mofra]

The banks were still making good profits even after factoring in 0.7% discounts, and low docs.

The point is the banks already make enough money without having to rape customers who help make them the money. It's called a degree of morality.

Why should they make a loss on loans just because they have other successful arms of the business? Most banks already make a loss on over half of their loan book.

We could go back to the 80s when 2% profit margins on loans was the norm, home loan customers subsidised deposit account holders - yet that would probably again be outside a "degree of morality" as you would be paying 1.7% extra overnight under new similar regulation scheme.

 

[MPmelb]

... however they are making a loss on their mortgage operations which is why they are shutting it down & sacking 150+ staff.

It is then obvious they are trying to rip off the last few remaining customers they have before they shut down shop. looks like it is time for us customers to leave also...last person turn off the lights.

 

[alexlee]

cheap money??? look at bank profits and try to tell me they are really suffering.

And as investors, don't you think we've benefited from the bank's willingness to lend? It's not just about the rate, but the volume. We've been able to buy our properties and watch them go up because the banks have been generous with their loan terms.

You do realise that being self employed before and temporary now, 20 years ago you probably wouldn't have been able to get a loan at all?
Alex

 

[steveadl]

I agree with Alex on this one.

Banks are a business, just like any other. The reason they make billions in profit is because virtually every person in Aust. is their client (and in a lot of cases multiple client). Show me a business in Aust. that has as many clients as the big banks and that sort of turnover that isn't making billions? If they weren't making those sorts of profits, it would be a pretty pathetic business!

As Alex said - people love to slam the banks when they increase rates, but don't thank them when they decrease them lower than the RBA, and help out people who wouldn't be able to get loans in the first place.

In my situation - I have a very large amount of debt, which wouldn't have been possible to get 20yrs ago (ie. Low Doc), and I'm very grateful for it. I also have the bonus of not having to pay extra % margin for the privilege (you don't necessarily have to pay extra to be on low doc).

Said it before, and I'll say it again - I love the banks! Put it into perspective - without them, how many on this forum would own any property yet, let alone multiple? Takes a long time to save your way to pay for 100% of a house! Especially since that money would be sitting under your mattress, and not earning interest in.....a bank.