Westpac std variable discount >1.5 mil

D

dredfern

Hi all,

I'm about to apply for my new PPOR loan with Westpac through my broker.
Currently loans of about 750K at 5.59% (.92 discount) at 90% lvr.
New PPOR loan will push total just > 1.5 mil also at 90% lvr.

Do you guys think I be asking for further discounts prior/during the loan application or wait until the lvr is stronger, say below 80%, and then request?

Cheers!
 
WBC arent necc too rate concerned with the lvr asother lenders are

More to the point, WHy are you looking to take LMI exposure of over a mill with WBC ?

seems a risky business ?

Best practice would suggest spread the risk

ta
rolf
 
I didn't want to move all my old loans as I will have to pay LMI again!

So the decision would be to take the new loan $756K at 90% with another bank or also with Westpac at current .92 discount or possibly better now loan is larger?

What would others do?
 
Just to confirm, current loans are already with Westpac and already paid LMI!

My current thought process was to also get the new loan with Westpac and wait until my lvr is below 80% where I can start bargaining harder or moving if desired without repaying lmi?
 
With 90% leverage it is harder to bargain. If you have already paid LMI then stick with WBC and get that loan increase with them to avoid double paying. Are you crossed collateralised? If not you can move one loan to another lender. If not the LMI will be HUGE even for a small loan increase due to the size of the loans involved here.
 
I agree with Rolf that you're asking for trouble with Westpac for a 90% lend with total exposure above $1M. We've had loans rejected by Westpac where the circumstances were similar. Affordability was very strong but the deal was rejected due to high risk exposure.

To answer your question though, we recently obtained a 1% discount of the SVR for total borrowing of about $1.3M with LVR well below 80%. Initially Westpac only wanted to do 0.9% discount and we had to fight very hard for it. In discussions with my business manager he essentially told me that Westpac were not really interested in being price compeditive.

A 1% discount should deliver a rate of 5.51% under the Pemier Advantage Package. I recon you could actually do better than this with a loan of $750k with several compeditors.
 
dredfern said:
Just to confirm, current loans are already with Westpac and already paid LMI!

My current thought process was to also get the new loan with Westpac and wait until my lvr is below 80% where I can start bargaining harder or moving if desired without repaying lmi?
Click to expand...

u can leave ur existing stuff, take the new loan to a new lender.......simplereally :)

Do I smell u are crossed.

ta
rolf
 
Nah no crossing!

Cheers guys, I did the borrowing capacity calculation with my broker and we had plenty of room there but I didn't realise Westpac might knock us back due to total exposure.

I do have a relationship manager at Westpac, should I discuss with him before any application?

Will also think about other lenders too! My wife also has a 270K loan with NAB.
 
I have a similar exposure to you with Westpac and similar LVR, and they gave me a 1.06% discount, bringing my rate down to 5.45% variable.
 
luckyone said:
I have a similar exposure to you with Westpac and similar LVR, and they gave me a 1.06% discount, bringing my rate down to 5.45% variable.
Click to expand...

Hi luckyone,

Did you negotiate this directly or through a broker?
Did you have any issues at all with total exposure?
 
I rang up the retention team and asked for it.

Yeah, they said they wouldn't finance my next deal because I'd go over $1M with 90% lvr, but St George were happy to.
 
Just spoke to WBC relationship manager. He doesn't think the total exposure should be a problem if other strengths highlighted, says more of an issue with single loans over 1Mil!
 
dredfern said:
Just spoke to WBC relationship manager. He doesn't think the total exposure should be a problem if other strengths highlighted, says more of an issue with single loans over 1Mil!
Click to expand...

That is not true as it comes down to a computer credit scoring issue. Historically the bank has found that people with exposure of $1m to them with a 90% leverage tend to be bad payers, so they don't want it.
 
PT_Bear said:
To answer your question though, we recently obtained a 1% discount of the SVR for total borrowing of about $1.3M with LVR well below 80%. Initially Westpac only wanted to do 0.9% discount and we had to fight very hard for it. In discussions with my business manager he essentially told me that Westpac were not really interested in being price compeditive.
Click to expand...

Went through the exact same thing last week for an exsting WBC client. Pricing came back with a 0.9% discount for similar borrowings as above and a low LVR. I told my WBC contact that I wouldn't go back to the clients and tell them that's all that was on offer. They upped it to 1%

Last year, we were able to arrange 1.06% discounts on deals less than $900k

Cheers

Jamie
 
>$1M with LMI can mean no more DUA.

Also can mean no longer going on banks assessment rate RATE+1.5-2% instead need to try and service the loan on the mortgage insurer assessment rate which is much higher.



Sometimes its great to be with one bank to maximise the discounts available, other times as mentioned it can shoot yourself in the foot.

Because hey.... having >$1M borrow that just means your a bad guy and high risk right :eek::confused:


I would look to see if your discount could be increased with Westpac aiming for a rate <5.5%

Any future borrowing whilst still >80% would likely going to be easier with OFI
 
dredfern said:
I do have a relationship manager at Westpac, should I discuss with him before any application?
Click to expand...

Dont bother

Credit and their LMI folks will make their decision.

Use another lender.

There is very little benefit for getting something approved at the edge.................

Just think if you want to go back in 6 or 12mths and get some equity out ..............then you will be in a position which may not be ideal, having paid MORE lmi and stuck

ta
rolf
 
ummm LMI + 1 M total exposure...dangerous mix - all for an extra 0.10% discount...

You could easily save on this 0.10% by getting a cheaper LMI cost with another bank + there's no need to worry about total exposure...this also provides you with the flexibility and security of two banks and lowers your risk exposure.
 
Thanks for the responses guys!

This PPOR will almost definitely be my last purchase for about 5 years by which time LVR should hopefully be well under 80%!

New loan will be 756K plus lmi capitalised of about 19K. LMI is a lot but I figured 2% of the value was better than waiting for values to rise 10%.

I guess I was just thinking that in a few years when LVR is below 80% I might be in a better negotiating position having it all with the same lender, and could easily move if needed. But I guess it also increases the chances they will start rejecting future loans.

Cheers!
 
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