Hi guys some serious help needed what do you think are pros and cons of
"Bankwest Rate Tracker Ultra Home Loan (0.9% off avg. SVR of BIG 4s for 3 years)" converts to lite home loan after.Is it too good to be true?
My strategy: i am looking to buy first home /investment property (will live in PPoR for 6 months cosmetically renovate then rent it out as IP), i will hold for 5-10years and the area i have been inspecting and researching for over 6 months will get me a 2bed unit PP 280k-300k with a GRY of 6%. My plan is to buy renovate and rent out, and revalue for future deposit for other IP
Refer to loan here http://www.bankwest.com.au/Personal/Home_Loans/Home_Loan_Products/Bankwest_Rate_Tracker_Ultra_Home_Loan/index.aspx
It says one off app fee with no ongoing fees.
100% offset account for 3 years only? I thought you could have the offset for life of the loan?
Interest only option with conditions (can you have interest only for life of loan or for only certain time – i want it for life of loan , is it normal with other banks)
no exits fee – is it to good to be true?
and eventually i want to fix my rate when upswing approaches now do bankwest have good fixed rates in general ( i saw 3 year fixed for BW at 6.14% while St. George 3 year fixed was like 5.64% are thee fix rates always behind the bigger banks?)Now is this a good loan product for my strategy , at the moment i have been declined approval from big bank because all i have in savings of $7000 plus FHOG of $14000 and they only take genuine savings. Bankwest sees the whole picture including FHOG and willing to lend me $266,000 with purchase price of $280,000 if i use FHOG alone.
So i guess what im trying to get at is this loan/bank product good for what i want to do?
Thanks for all your insight.
Cheers!
Hi
I think that is a good product. Lots of people don't like Bankwest's service, but that shouldn't matter too much if you are saving interest. After 3 years you reassess the loans market and move elsewhere if need be.
IO is generally only for a initial period of 5 to 10 years. The loan then reverts to PI – or you can request a further period of interest only. The offset is only available on some products and this product reverts into a different product in 3 years – one with no offset. Depending on your circumstances you can change products and incur a small fee or more banks.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
thanks terry so after the three years it says it converts to lite home loan but can i actually change to their other product the lite plus home home? That is the one with the offset account for a fee i think $15 per month (is that a reasonable fee?) . After three years i can change to another bank will i pay break cost or will that be over the term that i need to stay with bankwest to not get slapped with an exit fee? Thanks for the info Terry
Hi Young
Unlike Terry i have a real problem in the Bank West service.
Yes i agree the product on the surface looks ok (In fact i have done a few deals for clients who dont mind waiting a while to get their loan approved) but to me the overall service and product features mean you dont really have an option but to refinance after 3 years.
Look at the SGB 1.5% discount off the variable rate for the first 12 months. It has the same strings and drawbacks.
i guess if you are not in a hurry or you get your mortgage broker to apply for a Pre-approval upfront so a lot of the work is done and then only make the application formal when you find a property it could be fine.
Richard Taylor | Australia's leading private lender
thanks guys for the comments, i haven't dealt with bankwest loans in the past , i have a telenet saving account with them at present, now i guess st.george is just as bad i got my broker to seek pre approval from the around last Monday , and we still havent got a final word from whats going on. so i guess is that whats going on at the moment with all banks?. Im really 50-50 with bankwest and stgeorge, who would you choose from them . after the 3 years with bankwest you have to refinance to one of their other loan products – will you have to pay for application fees again etc. What about after 12months (1.5% SVR discount) it goes to their normal SVR does that have an offset account etc . or do you have to set it up again just like with bankwest. Thanks again for the feed back Terryw and Qlds007 .
St G have been swamped because of their latest discount offering. At the end of the period it just reverts to the normal rate less the discount applicable. eg 0.7%,
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Yes now Terry is definately correct there.
Allow yourself a good 21-28 days if you ever lodge an application with the Dragon.
One downside for me is the application has to be done under the Professional Advantage package which means as a condition of future loans they all have to be cross collateralised.
Richard Taylor | Australia's leading private lender
my understanding is Bankwests rate tracker is as you said 0.9 of standard, ie 4.84 then converts in 3yrs to 0.5 off for life of loan… Currently with westpac I have 0.85 off for the life of the loan and thats with only 450k variable, the rest of my money is all fixed (unfortunately)
The point is nows the time to negotiate with the banks on the deals they can get you..
Try the broker mates rates also becuase with combank they can get you from yr 2 of the loan for life 4.84 (at the current cash rate) becuase they pas on the rebate of 0.2 on top of the Combank discount, however i heard a rumour today that combank may lift there package deal to a lesser discount, check this.
cheers
EH
Commbank cut their rate discounts as from yesterday.
Richard Taylor | Australia's leading private lender
yeah and you need genuine 3% savings as a deposit (they do not take into account FHOG) i guess there scared that they will borrow too much and default when rates go up.
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