Westpac 3 Year Fixed

Big ad for the Westpac 4.99% deal in this morning's Brisbane Courier Mail.

In equally large print to the 4.99% (but in slightly paler type) was "Comparison rate 6.45%".

Sounds as if there are substantial fees somewhere along the line.

Better check the fine print....
Marg
 
Marg

Forget the comparison rate, that just means the first 3 years are at 4.99% and the best guess for the next 22 years is 6.21%, which means the cost over 25 years averages out to the comparison rate. The comparison rate is the biggest waste of time, and confuses more customers than it helps by a factor of 10.

There are no extra fees, just the $395 package fee if you're on the package. No hidden costs. No extra sneaky fees, just the usual sneaky fees that every bank charges...
 
Fixing

Hiya

Am going to fix half my loans; what's the saying "a bird in the hand ....."

The risk of rates going higher is greater than the reward if it goes lower...if you catch my gist.

BTW, tried to call Westpac this morning to fix...too busy they have to overflow to new loans section.

Cheers
jennifer
 
I have been told from Westpac that it is only just rumours that this rate is about to go. A lot of other banks are trying to start rumours.

My current personal banker at NAB told me that it was an error and that they withdrew the rate already . I have to refer him to the westpac home page...his only repsonse was oohhh.

He also claimed to have contacted westpac and told that this does not exist. He also said that on the webpage it now had N/A under 3 year fixed.

Oh well, I sent him the discharge authority today, hope he like it.
 
Letiha

tsk tsk tsk :)

You are so cynical, Bankies not knowing what competitors proucts or policies are, surely you cant be serious :)

Im sure the PB will get the message with the discharge.................please prime him to make sure it doesnt take the usual 4 weeks plus, so that you can settle your purchase on time

ta
rolf
 
Never having looked at fixed rates up until now, I am a little naive about how they work.

The discounts that apply to variable rate packages for loans in excess of certain amounts, do they also apply to fixed rates as well or is it simply what they state. eg 4.99% for the 3 year WBC rate (Which is 5.19% minus the 0.2% p.a. discount off the standard fixed interest rates for borrowings over $150,000)
 
Hiya Buzz

Pro packs of diff lenders apply slightly diff discounts to fixed and some none at all.

The variable rate discounts are usually based on the carded rate which have a great ROI for the bank, so they can do a 50 or 80 pt discount.

ROIs for fixed rates are "usually " much skinnier

ta
rolf
 
Just heard from our BDM that the Fixed rate may only be available this week for applications lodged before midnight 12/12/08.

Might be a ploy to push the 0.15% Lock in fee or an indication that it will disappear early next week.
 
Rolf

I'm hearing the same thing, from two BDM's and an employee. No doubt in my mind this was a quick marketing ploy and the rate will disappear soon. Working hard tomorrow no doubt!

Noel
 
Correct I just got this:

Hi Kylie

I have just received an Email on-forwarded from the State Manager regarding the "shelf life" of the 4.99% loan offer which in part reads :-

"We assume this offer is likely to have a max shelf life of days, not multiple weeks. I encourage HFM's and BDM's to have this preliminary conversation with customers (both new applicants and those they have just put into the pipeline) on rate locking. Based on current margins, once the offer is withdrawn the 3 year interest rate is likely to come in around the 5.69-5.99% mark based on current yield curve - well above the cost of a 15bp lock in."
 
I'm pretty interest rate-insensitive - much more focused on how much they'll lend me ;) - so I've not really spent much (OK, any :p) time examining rates charts, and find that I'm quite ignorant about how to read them. :eek:

I understand the comparison rate, but what is the meaning of "margin" in this context?: http://www.boq.com.au/todaysrates_homeloans.htm

And I know in general terms what a reference rate is (eg LIBOR), but I don't understand what a reference rate is, that changes for a particular product, and is a number rather than a reference to a standard. :confused:

I look forward to being enlightened. :)
 
Isn't it funny how these interest rates have suddenly become so interesting!

Same with me I was only interested in how much we could borrow until now but with our financial position shot to pieces after enduring the last year these interest rates have become absolutely imperative to our survival and if we can just survive another month or two we will actually have spare money in our pockets again. The trouble is with banks snapping at our heels it will be a small miracle if we don't lose at least one property to them and thus our credit rating and future plans will be down the toilet!

Its so cruel with so much light at the end of the tunnel!
 
Hi Sparky,

I can SO relate !!
Same with me I was only interested in how much we could borrow until now but with our financial position shot to pieces after enduring the last year these interest rates have become absolutely imperative to our survival and if we can just survive another month or two we will actually have spare money in our pockets again.
Mind you, I've bought nothing in the last 4 years - but the cost of HOLDING has been quite a learning curve for me.

We hear of a 3% increase in Interest (over time) from 2005 - but, what that really is, is around a 50% increase in "holding costs".

But wait, there's more :p That 50% increase is valid for home buyers, etc. But, what about the investor (who might have had the first ~5% of the mortgage paid for them by the tenant?)

Using my own case as an example, my "costs to hold" (because of increasing Interest Rates) soared up from 2005 to 2008 by 450% !! And, no, that is NOT a mistype !!!

No wonder some were "finding it hard to get by" (I was!!). With the recent Interest Rate drops, my position is easing quickly (and I may even get to retain my properties :cool: ) The 450% has already reduced to ~ 260%, and likely to get near 160% once the latest 1% "goes thru".... With further drops in the New Year, it is possible that my holding cost might revert to around where they were in 2005. Of course, the rents have increased, so this would work well for me !!!

For me, the only concern is whether the RBA "has it right this time". To my mind, they DIDN'T have it right in Nov 07, Feb and Mar 08. So, how am I to know if they have it right this time? At least, this time, it is in my favour... :cool:

Regards,
 
Hi Les

I think there are so many people out there in crisis but not many speak up about it. I was thinking today it would be very interesting if someone who knew how to set up a poll made one to see whether we could get a feel of how many other people on the forum are in strife. I know a lot of people are very private and don't like to share when things are going wrong but we all need to learn from each other and support each other in bad times aswell as good.

So if there was a poll may be it could ask things like:

How badly have you been hurt by the financial dramas of the last 12 months?

1. Not at all
2. Just keeping our heads above water
3. Defaulted on loans
4. Had one property or more repossessed
5. Have been given a bad credit rating and am now out of the game
6. Have gone bankrupt

Just a thought anyway, obviously plenty of people would wish to remain anonymous but it would be good if lots of people could vote on something like this because really we have no clue how everyone is doing ('cept for me 'cos I keep carrying on like a two bob watch)
 
Good point Les.

I've had the same problem. My holding costs have been funded by two LOC's.
Which means I let them increase. The interest rate drop has just come at the right time. I had tried for a top up a few months ago with both the banks I use. My debt service ratio had climb to about 112% with the 8.9% interest I was paying.

I'm just now in process of getting my ip's valued as our MP believes that if my own estamated values are correct and I link some ip's together I'll be eligible for a top of $180,000. I'll then use this for a deposit for our next hit at the market.

Just one other thing with Low Doc's. CBA have moved from 80% LVR to 60%, where as Wetspac are still doing 80% Low Doc. So I have to move on this quickly and get my pre-approval before Westpac also go downn to 60% LVR's for Low Docs.
 
Well, I for one will also put my hand up and say things have been rather tight over the last year. We had fixed loans on very low rates mature into very high rates, 2 loans with RHG that rose to close to 11% AND 5 properties in a regional area that were vacant for between 3-5 months as the demand fell quite heavily in that area. Then add into the mix structure issues whereby those vacant properties and a few others that were heavily neg geared were held in a Discressionary Trust thereby making the losses NON DEDUCTABLE.

Well, the solution for us was that I was previously a stay-at-home mum, so obviously I had to find work ASAP, which luckily I did before things became too bad. One reason that I have not been on the forum much lately. This one thing has kept us out of trouble, but now we are in the process of restructuring and doing what we can to avoid the same problems that came to light. These were previously unkown.

Firstly, the vacant properties have all now got new tenants. Phew! A huge sigh of relief. These properties will be sold off as soon as we can as there are some other issues on top of the vacancies, but we have to get the new tenants settled first. We are anticipating this will take some time as the last one we sold in the area took over 6 months to move, but at least with tenants in there, we can cover costs.

Next, selling a couple of Trust properties to ourselves. These 2 were on the heavy RGH interest rates. Will lock them in at a much reduced rate. One in my name, one in Hubby's. This will save us huge amounts in Land Tax as well.

In the process of purchasing a new PPOR. The savings from moving things out of the Trust should more than pay for that, plus we will rent the old one. Just got to work on the debt recyling now.

Much as I hate to work, I will remain working for the moment to try and rebuild the buffer that we once had.
 
Just heard from our BDM that the Fixed rate may only be available this week for applications lodged before midnight 12/12/08.
Still advertised in todays paper (14/12), so that rate is still available. Don't know how long for though.

Like a few others here, I'm trying to resist the temptation and hang on for a good 5 year fixed term.

Regards
Marty
 
There's still so much uncertainty out in the global finance market , rates will come down next year so the 4.99% by Westpac is only the first off many CBA, ANZ & NAB still haven't put there bids in for lower rates.

With the US Fed meeting on Dec 16 , there should be a cut , as the deal with the 3 major car makers bail out not going through the Senate votes , our car industry Ford and GMH rely heavily now as it is with the USA and more so in the future with the supply off eco green emission cars and electric hybirds coming on line 2010 .

Then there's the slow down in China.

The government's 19.7 Bn dollar spending is has only band aid effect for the short term.

This is the time next 6 -9 interest rates will be at there lowest.

Im holding out sub 5's - 5 yrs

OTPPK
 
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