I’m quite new to investing in property and I’ve only had an investment loan of $420k for 4 months.
I’m currently receiving 0.8% discount, which puts my current rate at 6.81%
I spoke to the bank mentioning uBank 6.39% and the CBA rates between 6.5 – 6.7 I’ve seen quoted by investors with similar loan sizes.
The bank said because my LVR was quite high, and that I had only had the loan for 4 months it would be hard to do anything, but in the end offered me two choices:
1) .05% off
2) Refund the loan package fee for the year of $395He offered #1 first, put me on hold then came back with #2 which he sounded like he was really trying to push me towards (which made me skeptical!)
He worked out that .05% off would save me about $200 the first year.
I’m unsure what to do here, I see the .05% as a stepping stone that could be negotiated further and further as the loan progresses, but the $395 is mighty tempting ! Or should I go back and try to negotiate further ???
How far have people got with the discount after negotiating year after year ?? Initially I was given 0.8%, then 4 months later a simple phone can get me 0.85%
You could get hte package fee waived and then go back later and complain about the high interest rate!
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
Which Bank ?
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Westpac
Curious as to why you asked that Richard, are some banks easier to negotiate with than others ?
Definately and Wesuck are not one of them.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi bucko
Your bargaining power will come down to your total borrowings and LVR.
Is your LVR above 80%? If so, WBC know that jumping ship will involve you paying LMI again elsewhere…..therefore, they catch your bluff and won't offer a discount.
If your LVR is below 80% and you want to move elsewhere simply for a cheaper rate – then you have options. Some lenders will even rebate some of the switching costs.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Qlds007 wrote:Definately and Wesuck are not one of them.Cheers
Yours in Finance
Yep, they're not the easiest to negotiate with. We've organised a couple of 1.06% discounts in the last month for borrowings around the $700k mark…I doubt they would consider going any further at this level…..ANZ will give you 1% off anything over $500k if the LVR is right.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Good luck with Westpac or CBA- they have ~28%+share of the residential market each!!! so they are big enough not to care about one or two loans…especially high LVR and low loan amount clients.
I’d say take the 0.05%- then 2 month later complain again and get another 0.05%.- it be hard to get a straight 0.1% whack given your high LVR because they know you won’t refinance.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
I didn’t pay LMI due to having a guarantor.
Does this help my cause much?
I think I will ring CBA and see what they can offer. If its better, then I will use that in my negotiations
bucko666 wrote:I didn't pay LMI due to having a guarantor. Does this help my cause much? I think I will ring CBA and see what they can offer. If its better, then I will use that in my negotiationsUnless you use a gaurantor on the switch you'll prob have to pay LMI.
Sounds like a lot of paperwork everyone – all for a small savings. I'd take the small discount on offer.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Thanks Jamie, I really don’t intend on switching but I want Westpac to think I will to get the best possible discount.
From what I’m hearing what they’ve offered is pretty good so I guess my original question still stands – should I go with the .05% or take the $395 and “have a great night out” as the guy said ?!?!
It should be just a mathemetical calculation in that case???? Which is larger 0.05% of the loan or $395?
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
I liked Terry’s suggestion, take the $395 off right now, thank them, and then wait and see what happens with interest rates. come February or so, call them back and show some comparison rates and try to then get a 0.1% discount later…
using an online interest only mortgage repayment calculator, I used the following figures:
loan = $420000
term = 25 years
interest rate = 6.81%and it showed a minimum monthly payment of $2383
if you chop of 0.05% and bring interest rate down to 6.76%, then over the next 12 months with no change in rates you’d pay $2366. So a saving of $17 a month with their offer, meaning you’d have to benefit from this for 23 months for it to equal their offer of no annual fee.
So take the $395 discount
Terryw wrote:It should be just a mathemetical calculation in that case???? Which is larger 0.05% of the loan or $395?That's the equation I'd be using….and if you intend on staying with them for longer than a couple of years than the rate discount will prob best.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
I’ve spoken to CBA, NAB and ANZ about what they can offer.
CBA and NAB were both 6.76%, however ANZ blew them out of the water and offered 6.65% (0.9% discount) and package fee of $395 waived in the first year.
Ill put that to Westpac today and see what they can do.
buck might want to be quick with the Anz deal as at this stage it is only valid until end of Nov.
Then it will be someone else turn to win a wee bit of business.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Good luck with westpac….
nab will match it- you just need to ask and escalate it
http://www.shapehomeloans.com.au/blog/nab-will-match-any-advertised-rate-2011111160Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Thanks guys.
This might be a bit of a silly question, but here goes;
A broker organised the original Westpac loan for me. Should I speak to him about changing ?? Or will his commission be reduced or cut by changing providers ??
I don’t mind if he organises the new loan for me If I do go with ANZ, but I want to be confident my interests are at the forefront and not his commission !
Alrighty, Westpac have increased to an offer of 0.9% discount and will get back to me later today or tomorrow.
Pretty happy with that.
Yes his commission will be clawed back if you refi within the first 18 months and even after this period he will loose his trail.
Need to make sure that he doesnt charge you the equivalent amount by way of a fee if his commission is clawed back.
I still go back to what i have said so many times before that the interest rate is such a small part of the overall structure for an investor it is not funny.
Without hard data it is difficult to comment further.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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