WBC lifts fixed interest rates

[see_change]

We've decided to fix most of our loans today .

We might get them cheaper later , but They're pretty good at the moment and in five years time we'll have no kids private fees so more money to play with then .

If we stayed variable , then we'd be more exposed .

Cliff

 

[WinstonWolfe]

I am slightly suss of the bank's motives too.
You could argue it a lot of ways.

- maybe the banks are trying to bring forward demand for loans now....using the threat that credit will be more expensive in the future.

- on simiilar lines, they might be trying to stimulate job demand within the property sector by increasing demand now...thereby keeping the commercial sector buoyed up.

- Westpac economist Bill Evans said a few weeks ago foreign wholesale funds for Aus banks are likely to have more risk attached to them in future, due to Australia's climbing net foreign liabilities. Maybe that premium is already being felt by the banks.

- and then it might just be as simple as the effect on the interbank cash rate.

all good fun as long as no one gets their eye poked with a sharp stick.

 

[Francesco]

With all the monetary easing by central banks everywhere, credit is meant to be better and interest rates should stabilised not head upwards again. This wide gap between variable rates and fixed rates is inconsistent with the intent of governments.

Where is the govt to posture and call banks to accoun? The bank oligopoly situation now appearing is gaining traction post GFC!

 

[steveadl]

I am slightly suss of the bank's motives too.
You could argue it a lot of ways.

- maybe the banks are trying to bring forward demand for loans now....using the threat that credit will be more expensive in the future.

It's possible WW, but I seriously doubt it. The banks can't handle the amount of business they have at the moment as it is due to lower rates and FHB'ers. Processing centres are flat chat - they're extending time frames, and even for internal staff to get a call answered is taking 45 mins.

 

[simo74]

Spoke at length to my Bank Mgr this morning, he was of the personal view that this is exactly the motivation. Rumours were abound a couple of weeks ago within his inner circle that FIXED rates would be falling again in June. I've made the incredibly hard decision not to fix.

LOL. A bank manager would have as much idea on future IR movements as a taxi driver would. A rumour is all it would have been because i can assure you bank managers would not be privy to that kind of information.

 

[Highlygeared]

LOL. A bank manager would have as much idea on future IR movements as a taxi driver would. A rumour is all it would have been because i can assure you bank managers would not be privy to that kind of information.

True, but I would pay a bit more attention to what my Bank Mgr said than a cabbie as far as the pecking order is concerned.

 

[WinstonWolfe]

It's possible WW, but I seriously doubt it. The banks can't handle the amount of business they have at the moment as it is due to lower rates and FHB'ers. Processing centres are flat chat - they're extending time frames, and even for internal staff to get a call answered is taking 45 mins.

Steve, I understood a lot of the FHB loan apps don't get approved....so increased overhead for less return.

 

[Token Funder]

With all the monetary easing by central banks everywhere, credit is meant to be better and interest rates should stabilised not head upwards again. This wide gap between variable rates and fixed rates is inconsistent with the intent of governments.

Where is the govt to posture and call banks to accoun? The bank oligopoly situation now appearing is gaining traction post GFC!

The government doesn't have an "intent" around fixed rates. Fixed rates are a function of the cost of fixed money which, in turn, is a function of availability and expectations around future rates relative to today.

We have seen variable rates that most borrowers haven't experienced in their lifetime, so you don't have to be a genius to work out they are more likely to be higher rather than lower in the future.

Swaps have been moving up for weeks.........

 

[redwing]

very very interesting.

maybe they're trying to artificially sway the market into thinking rates are going up again, get everyone to fix, and then rates fall - thereby increasing their margins to be able to pass on the futurs cuts to customers.

take from the left, give to the right so to speak.

Pretty much what I've been thinking BC

Clicky Link

Clicky Link 2

 

[Rolf Latham]

Margins on fixed tend to be skinnier than variable, so that may not quite work in the way you think ?

ta
rolf

 

[WASP]

Aren't we heading into a recession

 

[Aaron Sice]

redwing - i just posted up in the other economics thread that i think the scaremongering is out there about the recession to get all and sundry to fix - so that the bank (and obviously the cartel leaders, the RBA) can be let off the hook for not passing on the rate cut to a significant number of borrowers, while seeming to do the good thing for those that are variable by now being able to pass on the cuts and avoid the heat.

my bet this was what Swanny and Ruddy met with the big 5 about.

my bet the idea is to shift the blame for not passing on cuts to consumers, not the institutions

my bets is theres NO REAL evidence on long term funding rates swaying the increae in 5+ y fixed rate amounts.

my bet is the scaremongering is there to get you to fix.

happy to be proved wrong, because it means immediate short term interest rates will come down....to prove me right? confusing.

either way - i'll live by my decision and don't give a toss about statistics - because stats can be manipulated to provide the means to the end.

and you can't say 5y rates are on the increae because "everyone's getting one" (great thinking BTW redwing!) because last time i checked, lending criteria had tightened, good people are being refused credit and the lending pool has dried up.

 

[aw1]

In case anyone is interested....

I got stiffed on the 5.19% 3 year fixed rate. As Rolf said and also their consultants on the phone, the fixed rate is as at the time of application not at the time of approval. That certainly seemed positive. I applied on the 19th of April, the day before the rate went up 0.4% (to 5.59%) - note that I am including the pro package discount in these rates.

On the 19th I clicked the shiny button on the website that said "Full application online" and filled out all my details including all assets, liabilities, income, taxable incomes for the last 2 years, personal details etc. However, despite it clearly looking, smelling and sounding like I was submitting an application I didn't really submit an application until they re-typed it into another computer system.

I am quite annoyed at getting stiffed on the basis of terminology... we call it an application but its not really an application, until we say it is.

So 1 day difference is going to cost me over $6000 extra over 3 years if I were to proceed.

What's stopping them from always doing this... fixed rate changes coming so we'll stop transcribing applications into our system until the rate changes and then say bad luck, too late, to all those that applied online prior to the rate changing.

Note that I had clearly indicated in the application that I wanted the 3 year fixed rate and was to pay the fixed rate lockin fee of 0.15% (a not insignificant amount on the size of this loan).

I made a complaint to Westpac.. will see how it goes.

Hi Rolf

I applied online, so hopefully I should be okay then!! If not, I'll give you a call to find me another good deal

Adam

 

[Rolf Latham]

if you selected rate lock and youcan prove you applied, stick to your guns

They "must" honour your app

ta
rolf

 

[auror]

Wow, aw1, that really sucks. Please let us know how it turns out. As Rolf says, they should honour your app... but I can imagine them making life difficult for you before agreeing. Good luck + fingers crossed