Westpac Premier Advantage Pack - Good?

[ally]

Hi there everyone,

I hope you can help me out. I am currently looking for my first investment property, but before I do that I want to change lenders as I am unhappy with my current one, and want to structure so adding IP's in the future won't be a great headache.

I have been recommended the Westpack Premier Advantage Package, which is basically a professional package - no establishment fee, no valuation fee, $300 year global fee, free Classic Plus for offset, free Visa etc etc.

My question is, is there anyone out there to give me feeback, good or bad on this package, or dealing with Westpac themselves? I am attracted by the seeming ease of setup and the discounted interest rate?

Any comments would be much appreciated.

Thanks in advance,
Ally

 

[alpina]

hi ally,

will be interested to hear the response to your thread.

also looking at the westpac package and weighing it against anz's - unfortunately they both have their pluses and minuses though i think the westpac one is better if your total loans with them is greater than $500k due the the relationship factor between loans - 5.97%.

of course, the right person to steer you on the right track would be rolf

julie

 

[Sim]

I have one of those packages - my experience in dealing with Westpac is that they are very painful to get stuff set up, but once up and running it is fine - I don't have a problem. Their online banking is very good, and general service is reasonable. Discounted interest rates are very nice too.

Just make sure you allow plenty of time to get finance approved and then ready for settlement - none of this quick settlement stuff.

 

[Alan H]

I have one of those packages too and I've found it very good in all aspects.

 

[geoffw]

I have a package with NAB- very similar conditions, and I've found it to be very good. One of the best things with it is that I'm dealing with a banker who is a specialist lender- and I go to him personally for anything to do with banking.

 

[ally]

Thanks guys for that quick and positive feedback.

I loke Geoff's idea of a personal lender, who understands what you are trying to achieve. I am sure I can achieve the same with Westpac.

Westpac takes the sum of all loans into account when they give you the discount, so if all loans are over $500K your discount is 0.6%. I think some packages with other lenders take it on a loan by loan basis.

The fact I don't pay the $7 per month on the Classic Plus and the Visa annual fee that I am currently paying is an incentive.

I was always under the impression the big 4 weren't competitive with rates - just goes to show what you can find out by asking other investors and doing a little research.

Cheers,
Ally

 

[Rolf Latham]

Hi Ally

Its one of the better packs on the market where total relationship value exceeds 500 k.

1. 5.97 rate across all variable products inlc LOC
2. Discount applied to all loans once 500 k reached

Sometimes, depending on your scenario ANZ Premier Select is a much better thing especially where mortgage insurance and a combo of PPOR and Ips is involved.

Its not always clear cut becaue of what you want to do into the future and what your equity position is. The wrong structure and product can cost you the opportunity of another IP.


Ta

rolf

 

[Joe D]

Rolf

Do CBA do anything similar?
ie. Discounted rate for >$500k

Also with these particular items are they automatic or do you specifically have to request same?

PS: I have CBA pkge with relationship mgr, but sometimes it is a case of if you don't ask you don't get.

TIA

Joe D

 

[Rolf Latham]

Hi Joe

Mortgage Advantage

Single loan > 750 k should get 5.87.

500 should get 5.97 to 6.07 down to 250.

Product is not really comparable because the MISA offset is not a transactional account whereas the ANZ and Westpac ones are.

Ta

rolf

 

[brains]

What do you mean by transactional account, Rolf?

 

[Rolf Latham]

Hi Brains

Classic plus (Westpac) is an acct where you park ALL your positive cashflow and can write direct cheques, do eft, and dds from - its 100 % offset against the loan

ANZ ONE works in the same way, as do Bankwest complete, Homeside 100 % offste and a few others.

With Misa you cant do that and have to move chunks of cash on a regular basis to your Streamline acct. While this seems fine in practice many get sick of it, and the convenience of Classic Plus is preferred - in fact i have clients that have jumped CBA ship for that reason

Not all offsets are created equal

Ta

rolf

 

[brains]

Thanks Rolf, as ever most informative.

 

[ally]

Thanks again everyone, especially Rolf.

Rolf, I see you mention the LOC with the Westpac product. I am questioning the necessity of having a LOC if you have the Rocket Repay for your PPOR with a Classic Plus 100% offset account attached?

We are going to apply to shift our PPOR mortgage to a Rocket Repay and apply for additional funds with a Rocket Investment loan to purchase our first IP. We currently owe $250K on our PPOR valued at $550K. I was going to apply for $300K for the invesment loan, which I think would be our max re serviceability. However, that doesn't necessarily mean I would use it for one IP. I was hoping I could get two cheaper ones. Do you forsee a problem with this?

I understand that when you wish to buy further IP's you need to take out additional Rocket Investment Loans. Do I have this right? You raised the issue of structure, so I want to have the best structure at the beginning.

Thanks in advance for your time and assistance,

Regards
Ally

 

[Glenys Shepherd]

Hi Ally

We have the Premier Advantage Package however I have just noticed we have been charged a credit card fee on our current statement.
I will have to check this out further with Wpac

Cheers

Glenys

 

[john doe]

Hi Ally,

Your last questions about the LOC were directed at Rolf who can certainly answer better than me. But what the heck, I'll add my 2cents worth....

What you propose so far sounds like you'll end up cross collateralised. If you use the LOCs for the deposit instead, then you won't be.

CHeers

John

 

[Rolf Latham]

Hi Ally

Might I suggest the following,, since JD is probably right

Rocket Repay is good so 250 on that

Then secured against the PPOR only take an

Equity Access Plan II for say 80 000

Then do two Rocket Repay IP loans on an AIP basis at say 120 each, with each loan secured only by the one IP.

AIP = Approval in principle.

The numbers I am using here sort of correspond with what yopu wanted to do, but without tying all the properties to each other.

Seems that you could use the services of a independent broker if your Personal Banker has suggested the structure you mentioned.

ta

Rolf

 

[D.T.]

I've heard in some cases that an indepenant broker can get you cheaper deals than most of those packages can anyway?

Becoming good friends with a Bank manager could also help

 

[Sim]

Originally posted by dtraeger2k
I've heard in some cases that an indepenant broker can get you cheaper deals than most of those packages can anyway?

If it's just a vanilla loan you want, then I'm sure you can do better than many of these packages (but the interest rate discounts make them difficult to beat).

However, if you need a fairly complete package with offset account (and transaction account) and all the other facilities that go with them, then it's pretty hard to get better deals elsewhere.

But you should always consult with an independant broker anyway - they will be able to tell you things such as how the Westpac setup has changed recently (minimum loan amounnt increased) and how that affects your choices etc !

 

[Marco]

I agree with Sim,

A good independent broker will tailor a loan structure to your needs for now and for the future. They will also provide specialised and up to date knowledge and do all the leg work while you concentrate on other important issues in your life.

If you go to Westpac you are always going to get a Westpac loan. Take the 'blinkers' off and let an Independent broker open your eyes to the wonderful world of property finance....(No...I'm not a broker)

But seriously,

I believe if you are keen to continue investing in multiple IP's see a good independent broker and let them help structure your goals. I have always been sceptical about Bankies and their intentions.

See Rolf... I’ve just had the pleasure with dealing with him and he is absolutely fantastic. I am sure even the most experienced property investor would still learn something new.
I can see why so many people on the Forum always recommend him, truly a finance genius....and he's nocturnal too...9how much was my commission again Rolf?.. ;-)

all the best Ally....

 

[ally]

Thanks Rolf and Joe for putting me on the right track. As I understand it, getting a LOC for the $80K means we owe $330K on our PPOR. That is a scary figure to read, however I understand what you are saying about cross collateralisation.

To answer your question, I had just 'made up' the scenario myself from what people have told me and what I have read on the website. I am not using a broker at present. I did use one to set up my current loans and was not happy with the service provided, nor the lender he recommended. I currently have a LOC for $150K (only used about $25K so far) at 6.97% and the bulk of the loan on a more basic setup with a 6.25% rate. What I am not happy with is the break costs - 0.8%. At the time I figured I would be happy and not want to change in the near future etc etc, until I was stuffed around once too often ...

Therefore I could use the remaining $125K I already have approved for deposits, and take out IO loans with another lender for the balance. BUT I don't want to pay the 6.97% interest rate. I have spoken to them, but they can't give me a discount, even if I borrow more money for IP's.

I learnt a lesson here and this is advice for everyone - don't be fooled by the broker who comes across as your best mate, and uses lines like "I have even set my Dad up with this lender". He seemed like a genuinely nice guy (and he may be) but when we ran into problems, he deserted us. I fixed them direct with the lender. Maybe I expected too much from him, but I thought a broker's job was to see you through to the final stage of having all accounts set up and functioning as they should. Finally, don't be in a rush - that was our main problem, we wanted to upgrade our PPOR and saw a house we wanted before we sold our current one - NOT ADVISABLE, especially if you haven't organised finances first. I got burnt with this one!

Sorry everyone for this outpouring, but I hope my advice helps others from rushing in and being too 'trusting'. I don't want to bag all brokers, because I am sure there are very ethical ones out there, Rolf for instance. He certainly seems very kowledgeable, unbiased and very generous with his advice and time.

Thanks again, Rolf.

Ally