Im looking at getting a new ip. I have a current home loan with wespac and my previous ip loan (now sold) was with wespac.
I am looking to get a new loan and based solely on the figures it seems the credit union at 6.48% (victorian teachers) a better option than westpac at 6.81%.
Is there any disadvantage with going with the credit union?
I'm mainly worried about securing more finance in the future, as I plan to build a unit at the rear of the new ip.
I was once told to borrow from the banks until they wont let you then to move on to the credit unions etc afterwards.
any help is much appreciated, thanks.
Hi thek
We try to spread our borrowing around as much as possible, to avoid cross collateralisation and lender's "all money" clauses. Based on this and the fact that the credit union is a bit cheaper, we'd probably go with the credit union.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
I actually found out recently that non of the major banks, and as far as I am aware any of the second tier aust banks actually have an all monies clause in their contracts. They were removed over 10 years ago from the contracts but still exist in some commercial facilitites. They are somewhat of a commonly quoted myth.
I would double check the rate quoted. The other major 3 are all cheaper than Westpac, you might find only 0.1% difference to the credit union which is bugger all when you do the math. Banks are far more flexible.
I’ve recently won business from teachers and police credit unions and neither could match current bank pricing. In some cases when you have a rate rise the banks pass it on immediatly however some non banks hold back a fortnight: makes sure you are not comparing one pre last rise and one post last rise or you might be disappointed.
Banker
I just checked the site. Teachers credit unions rate is as of 14 April. The reserve lifted rates on th 4th may. Banks followed suit on the 4th. May. Not sure if it includes the rise or not…
You can stil get 6.45% (post May rate increase) with No application / valuation / lenders legals fees.
No monthly or any ongoing fees.
Richard Taylor | Australia's leading private lender
As nice a guy you are Richard, you only give the people on this site half the answer…. tell "thek" the name of the bank you are suggesting.
Qlds007 wrote:You can stil get 6.45% (post May rate increase) with No application / valuation / lenders legals fees.
No monthly or any ongoing fees.
I just called them. Rates are being increased effective this coming Monday : not yet include in the advertised rate. Rate will be approx 6.7%. Fees do apply.
You can get cheaper with the major banks.
Banker wasnt refering to TCU.
NAB Advantage rate with no applic / valuation or any ongoing fees is 6.55% or 6.45% less than 65% lvr.
Richard Taylor | Australia's leading private lender
NAB Broker arm….
how about PLAN? do they offer a competitive loan as well?Qlds007 wrote:Banker wasnt refering to TCU.NAB Advantage rate with no applic / valuation or any ongoing fees is 6.55% or 6.45% less than 65% lvr.
I see. Thought you were talking about TCU. TCU is not cheap then . They simply havnt raised their rate yet…
GOM
Yes the NAB Product is only available thru FAST, Plan and Choice Brokers.
Richard Taylor | Australia's leading private lender
Qlds007 wrote:You can stil get 6.45% (post May rate increase) with No application / valuation / lenders legals fees.
No monthly or any ongoing fees.
I would not encourage many people to throw a 35% deposit at a house……. This is a waste of equity? This would be considered inefficient investing, particularly as the original post by "thek" was concerned with securing more money in the future…….
At 65% + it is 6.55% (CAR) so take your choice.
Richard Taylor | Australia's leading private lender
hey guys thanks for all your input.
as you’ve mentioned I just saw the vtcu rates rise to 6.73%.
its still cheaper than westpac at 6.81%, plus if they hold off the increase a couple of weeks everytime there is a little more to be had there.
any thoughts, or other options that I should consider?
thanks.
Go for the lowest rate with low LVR…
why wasting money with 0.2-0.3% interest rateI wish they can do 50%LVR with 6% interest rate
Generally, you will not get a cheaper rate than a competitive credit union or no frills lender from any of the majors (with the possible exception of NAB) unless you are paying for a 'annual package fee ' type loan – great if you have a couple of loans, run a few transaction accounts, and a credit card or two. Not so great if you just want 'a loan'.
Had a quick look as an example with say MECU (one of the larger credit unions )just as an example, and then compare the basic home loan to basic and package rates from all the lenders – and you will see what I mean.
If looking at worstpic though, most bank or credit unions will be more competitive without trying too hard.Cheers
god_of_money wrote:Go for the lowest rate with low LVR…
why wasting money with 0.2-0.3% interest rateI wish they can do 50%LVR with 6% interest rate
I have always worked on the premise, the money you will make from property p.a is so much more than a small difference in an interest rate. Property is long term, the 0.3% is very little when you are making 10% on a Million dollar property. e.g Buying a property today of value = $500k, in 20 years the property value will be a conservative $1.5Mil, At that point, 8% growth pa equals $120,000, now the 0.3% on the original loan of $500k (cost equals $1500pa) is starting to look very lean. To become wealthy you need to think like a business. All businesses have expenses. Interest rates are just an expense of your business. No expense, No house, No business. I would never throw away $120,000 pa for an interest rate savings of $1500.
By saving 0.2-0.3% in interest your opportunity cost is another house. Please remember, the original post asked to secure money in the future.
Further, If making money was about the interest rate, the entire population would be wealthy…..
number 8: Are you suggesting that switching to a credit union would limit your ability to borrow for further investment properties? Is this a real problem?
andy28 wrote:number 8: Are you suggesting that switching to a credit union would limit your ability to borrow for further investment properties? Is this a real problem?It shouldn't restrict your borrowing but banks give you a better discount once you have a decent amount with them. By having all loans with different banks you are robbing yourself of decent rates.
eg If you have $800K in loans with the one bank you will get a 1% discount. That's $8000 a year you've thrown away by spreading your loans.
After that go to another bank. Repeat.Hi both
Yes hate to say going with certain lenders will limit your ability to go forward.
1% discounts disppeared around 2 weeks and is something none of the main lenders are offering.
In saying this i still would argue why you would limit yourself to one of the Big 5 lenders.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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