Negotiating rates with lenders for PPOR

Hi All,

Apologies if there's a thread/threads about this, I've spent a while looking but to no avail.

Could anyone offer any insight into negotiating a discount on lenders' interest rates? I'm not talking about negotiating techniques, more some thoughts on the willingness of lenders to roll up their sleeves and get down to talking some numbers.

We're currently looking for modest PPOR finance of circa $235K - $280K with LVR of 67% - 80% (depending on what we decide to contribute from our own funds) but it seems with a somewhat restricted range of lenders due to our personal circumstances (myself, self employed, no accounts until EOFY 2014 and my wife on a casual employment contract as a nurse) - we'd be going 5 years interest only with an offset facility.

I understand that although interest rates are very low, margins aren't, with the difference between the official cash rate and mortgage rates offering more negotiating space than has often been the case historically. I'm under no illusion that we're hardly deal of the month for either a mortgage broker or lender but is there likely to be room to talk rates for this type of loan?

I haven't discussed this with our mortgage broker yet but she's suggested that CBA are the most likely lender to go for our circumstances, so if this is the case, we'd probably be talking to them.

Many thanks in advance for any thoughts people might have. :)
 
Hi All,

Apologies if there?s a thread/threads about this, I?ve spent a while looking but to no avail.

Could anyone offer any insight into negotiating a discount on lenders? interest rates? I?m not talking about negotiating techniques, more some thoughts on the willingness of lenders to roll up their sleeves and get down to talking some numbers.

We?re currently looking for modest PPOR finance of circa $235K - $280K with LVR of 67% ? 80% (depending on what we decide to contribute from our own funds) but it seems with a somewhat restricted range of lenders due to our personal circumstances (myself, self employed, no accounts until EOFY 2014 and my wife on a casual employment contract as a nurse) - we?d be going 5 years interest only with an offset facility.

I understand that although interest rates are very low, margins aren?t, with the difference between the official cash rate and mortgage rates offering more negotiating space than has often been the case historically. I?m under no illusion that we?re hardly deal of the month for either a mortgage broker or lender but is there likely to be room to talk rates for this type of loan?

I haven?t discussed this with our mortgage broker yet but she?s suggested that CBA are the most likely lender to go for our circumstances, so if this is the case, we?d probably be talking to them.

Many thanks in advance for any thoughts people might have. :)

CBA won't likely talk discount til the application is approved. Once approved provide them with some offers from other major banks.

I would suggest borrowing 80% if possible, keep the funds available that you have in the offset account. No benefit in putting in the extra funds unless you're good with your money. Also borrowing >$250k with CBA will put you into better spot discount wise.

Without pushing for $250k <80% LVR you would get SVR with CBA @ 5.05% with bit of push could possibly get <5%.

Rate is far from the most important thing, getting the funds is the most important espcially when you have a niche. CBA is good for casuals and s/e who don't have 2 full year finanicals as long as overall application stacks up. <80% LVR is a good start.
 
If the primary concern is cost, and you wish to share more of the space between buy and sell price, make use of an online lender, thus get rates sub 4.7s........... but what is your time and your CRAA file REALLY worth ?

In reality though, I reckon Brady has it about right, as has your broker

ta
rolf
 
Folks, thanks very much for taking the time to respond, it's greatly appreciated. :)

Brady, I hear what you're saying about borrowing 80%, we would likely do that particularly considering the advantage of borrowing >$250K. We have the majority of our funds in GBP and EUR at present, so are looking to possibly defer exchanging to AUD in the short term. When you say "Once approved provide them with some offers from other major banks" I believe you mean offers in terms of generally published products rather than offers of funding resulting from multiple applications to several lenders?

And indeed Aaron, getting the finance is certainly the primary consideration - we're under no illusion that we're not readily digestible credit material for a number of reasons.

Rolf, yes I agree, despite being 36 and 45 years old, I believe we're totally off of the credit radar (long story!), so wouldn't want anything we do to have negative connotations. We're definitely not looking to save the last cent by any cost but would hate to miss even a small saving if all it takes is asking! Thanks also for offering your thoughts that we're on the right track here.

Edmond - very perceptive! I just chose the name because time and therefore waiting seem to be an inherent part of successful property investment but also because the verb means "hoping" as well as "waiting" and I like the implied optimism of it :)
 
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