Hi All,
Currently. I am on fixed rate and by end of this Month I will be moving on to Variable rate. The best my bank is willing to offer is 6.66% with 1st year fees waived off. I have contacted other Bank and they are willing offer me 6.49 with 1st year fees waived off. Also, my new Bank is willing to offer me 0.75% off the Variable rate for all the Mortgages I take in the future. My Mortgage is 380000. The only worry for me at the moment is that I have to pay around 1200-1500 in total fees to move from my old bank. I believe that it is worthwhile in the long term to move the new Bank.
I would really appreciate any advice or suggestions. Thanks in advance for all your help.
Based on the rates I’m guessing your with CBA and looking at NAB.
If it’s NAB I don’t think they will be cheaper than the other banks for long. Within 12 months the margin will narrow. Nab have higher cost of funds than ANZ and CBA. They are just buying market share as their loan book is less than half the size of CBA or Westpac ( albeit they much bigger in business banking).
As funding pressures ease the banks standard variable rates will line up again.
If you read the fin review or look at the APRA web site with bank stats etc; you will see that CBA and Westpac are still growing their loan books much faster than nab; dollar or pecentage terms.
Funny that even with the lowest pricing NAB still can’t keep up; the reality is that they still learning how to be good at the residential market; pricing is not everything.
I’m confident to say the rate benefit is short term.
For a $380k loan, most lenders will only offer a 0.7% discount off standard variable.
As to the future, the lenders will move in and out of the market as their available funds, pricing, management bonus decisions etc vary. Look at Westpac, 12 months ago they were competitive and growing, then they lifted their standard rate well above the other 3.Some lenders are starting to price risk, so the lower the LVR, the better the rate, < 65% you can get 6.49% without it being a 12 month intro rate.
In my view as long as the rate is competitive without necessarily being cutting edge and the fees charged are in line with the service required, I tend to stick with the same lender. If they are not providing the service or fees are higher than they should be, look around.
Good luck
GregAt under 65% you can get less than 6.49% but is interest rate everything.
Richard Taylor | Australia's leading private lender
Well if rates from neither lender were to change (and it is likely that the major banks will have the variation in rates for some time to come while they all play tit for tat) the bottom line for you is that on a mortgage of $380k, if you do switch banks, you would save $570 per annum in interest. If it was only going to cost you 5 or 6 hundred $ to change maybe – but for the amount you are talking to do so it would not seem very cost effective to me.
Cheers
Thanks Everyone for your valuable information. I was kind of 50-50 to move or not but I believe that based on the information provided here, I should stick my current lender (CBA) as in the longer term it may not be worthwhile. I wish there were no exit fees (would make the decision easier
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