Negotiated fixed rate - Westpac ?

[asdf]

Wholesale spreads have blown out hence the banks are absorbing the pain now by not increasing their rates. Hence they can't give anymore discounts. I guess the securitised guys will slowly be squeezed out of the market now that risk is more appropriately priced. ie no more cheap funding. Or they might get taken out by the banks in the next couple of years.

Interesting times for the banks.... any mortgage broker been tapped on the shoulder yet by the banks to give some re-assurance that "they'll be around for the long haul"? Take Rams deal with WBC, without it, some experts reckon they would've had to close shop cos no one was buying their CP. Westpac provides the retail deposits and balance sheet. I can see the banks buddying up with the brokers now to siphen business from non-bank lenders then in a couple of years, squeeze your trails and there won't be much you can do cos theres no more wizards, resis or rams around anymore.... just my thoughts..

 

[tonyc00]

Hi

Many thanks for the informative flow of advice/ comments.

Noting that WBC have indicated that they will "match" (I think) a lower offer from another lender, provided it is in writing, I have since contacted St Geo - thanks once again Rolf - that special 3 year fixed rate sounds great.

St Geo have taken the details ($1.9m in IP loans + $.4 in margin loans) and will contact me tomorrow.

Thanks also for the advice to negotiate out the $350 annual fee.

In terms of the future, I kinda lean towards the view of two .25% increases to come - but there again, who knows for sure. It just seems that eventually the Chinese will slow down their savings and start buying their own products thereby putting pressure on prices (inflation).

But on the other hand ... !!

Anyway, I'll post again when I hear from my new mates at St Geo.

Incidentally getting the .8% at wbc was easy.

I mentioned that .7% was available to most borrowers, and since I owed them $1.9m (in IP loans), could they give me "preferential" status. And in that way they added .1% to the standard discount - crazy.

I wonder what discount they would offer if I owed them, say $10m - probably
1.5% (just kidding).

Regards

Tony

 

[bennido]

Incidentally getting the .8% at wbc was easy.

I mentioned that .7% was available to most borrowers, and since I owed them $1.9m (in IP loans), could they give me "preferential" status. And in that way they added .1% to the standard discount - crazy.

I wonder what discount they would offer if I owed them, say $10m - probably
1.5% (just kidding).

Regards

Tony

Thanks for the response Tony. I called up my broker yesterday and asked him about this 0.1% discount thingy. And he said yeah it is possible and he's heard of people doing it. So I told him off for not telling me and not trying to get it for me !

Anyway, he is now trying to get it for me since I have just over $1m in loans with them. Keep you posted ..

 

[Spectre]

While on one hand I can understand the 'need' to drop your rate if you have a large amt owing (I'd be shopping it around myself)... but at the same time you have to bear in mind that if the banks are doing this then they will be adding a fee on or cutting back in another area.

So you can say oh I got this whiz bang interest rate but then you'll flip around and complain that they introduced a new fee on internet banking, or are increasing the package fee to make up for it (if / as applicable)... or something similar.

Think something similar has been noted to this effect before.

Thinking back... what 2-3 yrs ago, did you ever hear of a rate lock fee.

End of the day banks still have to make their $4BN pa profits as they have shareholders to answer to...

If you see where I'm going

 

[feihong]

End of the day banks still have to make their $4BN pa profits as they have shareholders to answer to...

yep, so we buy their shares so that the fee channel it back into our account Otherwise we just have to cop it.

 

[Spectre]

What... customers buying shares in their own bank... pah!

Hate to love them, or love to hate them perhaps...

 

[tonyc00]

Hi

I agree with the sentiment that what the banks "give" with one hand (by way of a lower rate to some customers), they take with another by increasing fees elsewhere.

However, back to the negotiations.

St Geo have now offered 7.55% pa (3 or 5 year fixed), and/or 7.42% pa(variable).

That compares with the WBC of 7.79% (fixed), and/or 7.52% (variable, after
0.8% discount).

Both banks have an annual fee of $370 (approx) but St Geo "might" waive it.

As a courtesy to WBC, I have given them the right of counter offer but at present the "dragons" have it.

Regards

Tony

 

[FrankGrimes]

7.55% for 5 years is great - Well done! you have a decent amount of borrowings so you are in a good position to negotiate..

 

[feihong]

agreed, that's a nice rate for 5 yrs.. with my own lender, they only give a flat rate of 8.09% regardless it's 1, 3, 5, or 10 yrs, and that is already the best rate they can give.

 

[chilliaa]

Chilliaa

20 year fixed?

Yes on my last property settled on 30 September i couldnt get the 10 year fixed rate of 7.18% which i received on the other properties settled earlier on this year. The best the cba could offer was 7.29 on its 20 year fixed which was lower than best rate it could offer me on 10year fixed. So i just took up there offer on the 20yr rate.

Doesnt really worry me whether its 10 or 20 year fixed as CBA allows a maximum principal repayment of 10K per year without penalties. So if i wanted to pay them off i would just pay $10k into each sub account and principal would be paid off with 6-7 years (roughly havent done precise calculations)

 

[Spectre]

their max fixed is 15 though...
http://www.commbank.com.au/personal/other/rates_and_fees/homeloans.asp

 

[chilliaa]

their max fixed is 15 though...
http://www.commbank.com.au/personal/other/rates_and_fees/homeloans.asp

I'd better check to be sure, but i only signed the documents 10 odd days ago and im sure it was 20 years.
I have a professional package set up with the cba so maybe its not offered as a standard loan to everyone, but at the end of the day im sure thats what i got.
They were also appologetic about not getting me a better rate so they removed the $300 fee for next year and also removed some annual fee i incur on one of my business overdrafts.
Maybe the bank manager is trying to get a promotion and wants sufficient loans written within limited time frame.

 

[Spectre]

might be your term is 20?

If its biz bank w/cba then I'd be wishing you gooood luck.

They'd probably need every loan they can get.

 

[chilliaa]

nope double checked today, its 20 years fixed rate at 7.29%

 

[sydney_kings]

I'm currently looking to finance my latest purchase - for a borrowing of approx. $450000 (approx $550000 purchase). I have an existing relationship of $1m.

Any suggestions on where to look for a major bank that may give > 0.90 discounts? would a 1% discount be possible?

 

[LynnH]

According to the head of Mortgage Finance (think that was his position) at the Big Donut (who was quoted in an article on housing affordability in 'The Australian' on 11th November 2006) all of the Big Four banks should give discounts of 1% for borrowers with over $1M exposure.

Cheers
LynnH

 

[Spectre]

True
but that was before the 'cost' of borrowing money went up for the banks. i.e. you see nonbank lenders passing the costs onto borrowers (in some cases) where the larger ones are absorbing it at this point in time to gain market share presumably.

That being said a 1.5M deal would probably be a bit of motivation for a few lenders.

 

[asdf]

1%?? Wow! I'd love to see that. Theres actually not much fat in it then. Banks are wearing some pain now. The margins on variables fluctuate a lot and in the midst of the credit blow out a couple of months ago, short term funding blew out to nearly 60bps over so these guys were borrowing at 7.10%. That was probably for a day or so, week the most and now back around the 6.85% level. Theres still not much in it if you say the standard variable is 8.32% less 0.80% discount = 7.52%. Theres a lot of expenses to pay when running a retail loan book. Interesting times ahead for the lending market.