Most popular Home Loan products at the moment

[kimba88]

Hi guys,

I've had my first investment property for just on 1 year now. I took a split loan out with ANZ with 100% offset account. I had 80% fixed for 1 yr and 20% variable P + I repayments. I did P + I repayments as i had the mindset of 'i should pay it off asap'. Reading through lots of these threads, it seems everybody does I/O. Would it be greatly beneficial to put more into the offset account rather than doing P + I repayments?

I'm also looking at current interest rates and loan products available at the moment. Can anybody share what they might think is an awesome 'bargain' of a product from either a bank or credit union? As my 1yr fixed rate is over, i didn't know whether it would be beneficial in either negotiating a new rate or jumping ship to somebody else. My variable rate will be 5.08% (can't remember what teh comparison rate would be :-/ ). I am looking for a 100% offset account and possibly fixing the loan again. I would also like to look at possibly buying a second investment property in the near future - will this change what bank i should go with or how i pull equity out?

Hope somebody can help. Thank you in advance

 

[Rolf Latham]

what LVR did u borrow at pls ?

ta
rolf

 

[Jamie M]

Would it be greatly beneficial to put more into the offset account rather than doing P + I repayments?

It can be - particularly if you own or plan on owing an owner occupied property in the future.

If you're not disciplined with money and will be tempted to blow the would be principal repayments elsewhere then IO might not work too well for you.

I'm also looking at current interest rates and loan products available at the moment. Can anybody share what they might think is an awesome 'bargain' of a product from either a bank or credit union?

Focus on structure over rate. In any case, we usually manage to get lower than the advertised rate with ANZ which it sounds like you have. So I'd aim to get lower with them before thinking about a refinance.

I quite like ANZ for equity releases at high LVRs - so if you're planning to take your borrowings above 80% for future IP purchases then ANZ can be a good option. I'd be aiming to get a reduced rate in this instance too (on both new and existing loans).

Cheers

Jamie

 

[kimba88]

what LVR did u borrow at pls ?

ta
rolf

88%.. so i had to pay LMI. Just needed to get into the market.. otherwise i never would have.

It can be - particularly if you own or plan on owing an owner occupied property in the future.

If you're not disciplined with money and will be tempted to blow the would be principal repayments elsewhere then IO might not work too well for you.



Focus on structure over rate. In any case, we usually manage to get lower than the advertised rate with ANZ which it sounds like you have. So I'd aim to get lower with them before thinking about a refinance.

I quite like ANZ for equity releases at high LVRs - so if you're planning to take your borrowings above 80% for future IP purchases then ANZ can be a good option. I'd be aiming to get a reduced rate in this instance too (on both new and existing loans).

Cheers

Jamie

Am i best off finding another property first so i can have ANZ release the equity, then look at fixing or refinancing?
OR
What is the best way to negotiate a rate in my current situation?
The rate i currently have i think is part of their breakfree package which alows you a 0.8% discount on their variable rate. It seemed like a 'discount' at the time, but it looks like it is just part of their standard breakfree package. My loan broker made it sound like they got me a special deal at the time. I am doubting that though

 

[Rolf Latham]

youd be best served most times to stay with the lender where you paid LMI.

Jamie can help you wih the ANZ stuff

hes the ANZ queen

ta
rolf

 

[Jamie M]

Jamie can help you wih the ANZ stuff

hes the ANZ queen

Haha - I've been called many things but never that

Best to stick with ANZ in this instance. The fact that you paid LMI means that an equity release above 80% won't incur a whole new LMI fee (just a small adjustment on what you've already paid).

If you were to refi to another lender it would cost you quite a bit in new LMI fees (so it's not worth it in my opinion).

You can use a broker to arrange this or go direct (but you'll be at the mercy of whoever is the branch banker that day - they might be good, bad or mediocre).

Cheers

Jamie

 

[kimba88]

Haha - I've been called many things but never that

Best to stick with ANZ in this instance. The fact that you paid LMI means that an equity release above 80% won't incur a whole new LMI fee (just a small adjustment on what you've already paid).

If you were to refi to another lender it would cost you quite a bit in new LMI fees (so it's not worth it in my opinion).

You can use a broker to arrange this or go direct (but you'll be at the mercy of whoever is the branch banker that day - they might be good, bad or mediocre).

Cheers

Jamie

Thanks Jamie. So what is the best way i could negotiate with ANZ? Any tips on what sort of rate i should be looking at if i kept my current breakfree package?

Can negotiating be done over the phone or will i have to go into a branch?

With my current situation, do you think i should change my repayments to P + I and fix my rate again or leave it variable?

Thanks for your help so far!

 

[Peter_Tersteeg]

Can negotiating be done over the phone or will i have to go into a branch?

Call Jamie. He'll be able to give you some good advice, possibly restructure your loans to better acheive your goals and he'll get likely get better pricing for you whilst he's at it.

@Rolf: ANZ Queen? That's below the belt.

 

[kimba88]

I still haven't changed my loan and now i've seen this deal..

http://www.suncorpbank.com.au/home-loans/genuine-offer

What do you guys think??

Are Suncorp known to have some decent packages and not increase their home loan rates willy nilly when the time comes that interest rates will increase?

I like this due to:
no fees
offset account.. although i think that comes at $5 per month or something
can split loan
low rate with discount

 

[Jamie M]

The current suncorp promo is really good in terms of rate and no ongoing fees - I've written quite a few of these of late.

They're timeframes for assessing deals have blown out due to the promo - but I've been told it's starting to get back on track.

Their servicing calc isn't too flash - which means they're a lender to use up early on in the acquisition process.

Cheers

Jamie

 

[Shahin_Afarin]

The problem with both Suncorp and ANZ is that you run the risk of snookering yourself later on in your portfolio. So say you have a couple of properties under your belt and then you want to draw upon the equity against the Suncorp loan - good luck because chances are that servicing will be too tight.

I think you are rate chasing and this isn't a problem per se but if you are going to be relatively aggressive in the future then you should have a proper plan in place.

 

[kimba88]

The current suncorp promo is really good in terms of rate and no ongoing fees - I've written quite a few of these of late.

They're timeframes for assessing deals have blown out due to the promo - but I've been told it's starting to get back on track.

Their servicing calc isn't too flash - which means they're a lender to use up early on in the acquisition process.

Cheers

Jamie

So as I have 88% LVR and needed to pay LMI, would I be best off possibly going to another lender only if I have 80% LVR? ANZ recently did a valuation on my house and it seems I have approx 60k equity. I was recommended by ANZ to use part of the equity to make up THE LVR from 88% to 80%

 

[kimba88]

The problem with both Suncorp and ANZ is that you run the risk of snookering yourself later on in your portfolio. So say you have a couple of properties under your belt and then you want to draw upon the equity against the Suncorp loan - good luck because chances are that servicing will be too tight.

I think you are rate chasing and this isn't a problem per se but if you are going to be relatively aggressive in the future then you should have a proper plan in place.

What sort of plan do you mean? All I want to do is pay the least amount for my loan including products I want like an offset account

 

[Peter_Tersteeg]

The problem with both Suncorp and ANZ is that you run the risk of snookering yourself later on in your portfolio. So say you have a couple of properties under your belt and then you want to draw upon the equity against the Suncorp loan - good luck because chances are that servicing will be too tight.

I think you are rate chasing and this isn't a problem per se but if you are going to be relatively aggressive in the future then you should have a proper plan in place.

This is very, very true. There's been a lot of discussion lately about the 'order of lenders'. The general thinking appears to be that you'll use lenders with terrible affordability first, and the more generous ones later.

The problem is, when you've got 4-5 properties, you can't qualify for more with the least generous lenders. You're also likely to have run out of deposits and the properties that have all the equity will be with those less generous lenders that won't let you use that equity.

You'd be forced to refinance those initial properties. This might mean paying LMI a second time which is a very expensive prospect. It might also mean a far less optimal solution in the longer term, which might put you in a similar property later.

Would you prefer to buy 2-3 properties and pay 4.7%, or would you prefer to be able to buy 5-6 properties paying 4.8%?

 

[kimba88]

This is very, very true. There's been a lot of discussion lately about the 'order of lenders'. The general thinking appears to be that you'll use lenders with terrible affordability first, and the more generous ones later.

The problem is, when you've got 4-5 properties, you can't qualify for more with the least generous lenders. You're also likely to have run out of deposits and the properties that have all the equity will be with those less generous lenders that won't let you use that equity.

You'd be forced to refinance those initial properties. This might mean paying LMI a second time which is a very expensive prospect. It might also mean a far less optimal solution in the longer term, which might put you in a similar property later.

Would you prefer to buy 2-3 properties and pay 4.7%, or would you prefer to be able to buy 5-6 properties paying 4.8%?

So which are the more generous lenders? I only have the one property at the moment, but am looking at getting a second.. Possibly interstate.

 

[Rolf Latham]

You'd be forced to refinance those initial properties. This might mean paying LMI a second time which is a very expensive prospect. It might also mean a far less optimal solution in the longer term, which might put you in a similar property later.

And often thats the price of progress.

some peops use NAB or AMP et alin the hope to get around that challenge, but if often doesnt work beyond the one property cycle, since that same borrower will run out of DUA with the bigger folks

It requires a delicate balance and consistent client mindset and ideology to balance where to go when.


ta
rolf

 

[tpepper]

Sorry if this is slightly off topic but does anyone know if any bank still offering 85% no LMI at the moment?

 

[Rolf Latham]

Sorry if this is slightly off topic but does anyone know if any bank still offering 85% no LMI at the moment?

Citi and The rock , unless you fall into some specialist areas in which case i may get 90 % sans lmi

my primary comment for most circumstances........

An lmi premium is a one off

a sad loan product, lender policy or rate is "forever"


ta
rolf

 

[tpepper]

thanks for the quick response =)

 

[Corey Batt]

Citi and The rock , unless you fall into some specialist areas in which case i may get 90 % sans lmi

my primary comment for most circumstances........

An lmi premium is a one off

a sad loan product, lender policy or rate is "forever"


ta
rolf

Bingo. That 5% LMI free may only equate to 1.5-2k, but could come at the long term cost of 1k+ per annum.