Re-financing - same bank or switch?

[alexlee]

I recently did two refinancings: one with the same bank (ANZ) and another where I switched from NAB to CBA. CBA had a better rate, and I wanted to spread my loans, especially as I would need more loans in the future.

I am on both the ANZ and CBA packages. CBA had the better 5 year fixed rate, but when I finished the refinancing I ended up paying something like $1,500 on various fees (mortgage discharge, etc) between ANZ and CBA. It was only a $190k loan so the fees was around 0.8%!

For the second refinancing, I told ANZ I would go with CBA again unless they could do better on the rate. ANZ gave me a 0.15% discount on their rate, which makes them pretty much the same as CBA.

The important thing, however, is that I paid almost no fees to refinance the ANZ loan when I stayed with ANZ. I saved something like 0.8% - 1% of the loan balance in fees.

Just something to keep in mind when you refinance, especially if you're not refinancing a huge amount. Those fees add up.
Alex

 

[Ecogirl]

Alexlee
Sometimes it's worth having a look around to see if there are better deals out there. One of my potential clients was looking to refinance 3 of his pptys - the deal he had with his current lender was OK but not the most competitive.

It would have cost him a bit to refi - I suggested he ask his bank for the same rates I could get for him elsewhere so he has the benefit without the cost. They met his request after a bit of protesting.

It pays to ask.
cheers
amanda

 

[JIT]

LMI on refinancing then reborrowing.

Also, if you refinance with another bank (so your LVR goes down), and then use the increased equity for further borrowings, and so your LVR then goes up again, eg 90-95%, you need to pay LMI on the full loan amount (eg 340K loan, 9k LMI). However, if you refinanced with the same bank, you would only have to pay LMI on the increased borrowing amount, which saves you a lot, particularly if you initially had a high LVR and paid a large amount of LMI.

GSJ

 

[DavidMc]

CBA had the better 5 year fixed rate, but when I finished the refinancing I ended up paying something like $1,500 on various fees (mortgage discharge, etc) between ANZ and CBA. It was only a $190k loan so the fees was around 0.8%!

Bummer... try to avoid working out how long it will take you to break even on that lower rate - it might be too depressing! (oh, and don't forget all that paperwork you had to do!).

 

[Rolf Latham]

.8 to 1 % ?

sounds a bit stiff Alex...........obviously no Vic or NSW Ips then ?

ta
rolf

 

[alexlee]

.8 to 1 % ?

sounds a bit stiff Alex...........obviously no Vic or NSW Ips then ?

ta
rolf

No, the refinancing was for a QLD IP. Working on the VIC and NSW IPs, though.
Alex

 

[lowb]

1. do the banks and the loans... i mean are they different depending on which state your property is in?

2. are large banks easier to negotiate with than small banks? im trying to negotiate on bankwest for them to give me a better deal. i've used some techniques, like quoting better deals to them, telling of them my intention to refinance.. but they wont budge to give me a better deal.

3. would you recommend ANZ, alex?

 

[Bandita]

1. do the banks and the loans... i mean are they different depending on which state your property is in?

2. are large banks easier to negotiate with than small banks? im trying to negotiate on bankwest for them to give me a better deal. i've used some techniques, like quoting better deals to them, telling of them my intention to refinance.. but they wont budge to give me a better deal.

3. would you recommend ANZ, alex?

Hi Lowb,

I just did this negotiating thing with ANZ (from .6% to .7% off variable rate with a 264K loan) - approval for another $300k probably helped, but I gave them the paperwork for other banks that would do .7% of a $250k loan to begin with - I still have the documents I downloaded from the internet for comparison if you would like some help. I said to them, (they'd done some screw-ups on my offset account) - that while I was upset with them (they fixed it promptly) I had checked out other lenders (a lie ) who were prepared to offer .7% off the variable rate (only got that from Somersoft ) - they said show us some evidence, and we will match it - I did, and it was all done withing 24 hours.

I do recommend ANZ, but make sure you get a good bank manager, because the bad (eg. Heidleberg Branch) ones can screw it up horribly (but the good ones - eg. North Melbourne branch) can do wonders!

If you want the docs, I still have them and am happy to help!

Cheers,
Jen

 

[alexlee]

1. do the banks and the loans... i mean are they different depending on which state your property is in?

2. are large banks easier to negotiate with than small banks? im trying to negotiate on bankwest for them to give me a better deal. i've used some techniques, like quoting better deals to them, telling of them my intention to refinance.. but they wont budge to give me a better deal.

3. would you recommend ANZ, alex?

The main difference I think is that the new bank will have to charge you stamp duty on the mortgage for the full amount, while refinancing with your old bank means I only pay for stamp duty on the additional amount of the mortgage. Rolf? Is that right?

I've been using the ANZ's breakfree package since my first IP (6 years ago). Their Moneysaver loan has one of the lowest variable rates for the big banks. Refinances, etc have been pretty smooth though I use a mortgage broker and don't deal with them directly.

This time I just called the pricing team myself, secured the discount and then told my mortgage broker to follow up. I think my mortgage broker took the ANZ pricing team's email, gave it to HIS business guy at the ANZ and they got it all approved. Sometimes you get lucky.
Alex