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Best way to refinance
Topic Started: 20 Dec 2016, 07:54 AM (2,490 Views)
Rufus
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Fisho74
24 Dec 2016, 11:14 AM
Great news it is an offset account setup against our loan 😊 Like you say people change their minds in life. This house was never meant to be an IP but lack of work (sunny coast) made it too hard to live there and had to move back to brisvegas. Thinking of buying a house in bisbane but paying 600k for something that still needs work done on it isnt doing it for me. I know rates are low but paying the loan out up the coast over nxt few yrs and been debt free would be a nice change. If we decide to move back to brisbane well we will buy then if prices havent gone through the roof ha ha.
Its either stay in the ratrace for another 7-8 yrs or another 2 yrs and be debt free and do an easier job or commute 3 days a wk. Choices choices...
Well done. It usually does cost extra for an offset account, but if you use them well you will more than recoup that cost in interest savings and the big one "tax deductions"
dachopper
24 Dec 2016, 12:04 PM
The lowest variable rate your going to get, even lower than from a broker, will be using an online lender like ubank or loans.com.au

I called a very reputable broker in nsw after being offered 3.99% variable from NAB and he almost fell off his chair, and said he couldn't match 3.99, and that was one of the best deals he had seen recently with the big four.
Bank Australia 3.59%
QBank 3.78%
Teachers Mutual 3.79%
Heritage, Bank of Sydney, UniBank, ME, AFG and others all offering 3.79%

Then it really comes down to what are the ongoing fees.
Your broker really didn't bother looking, and of course he could have used the NAB.

To be honest when I look for a loan for myself I want a good interest rate but I don't care if it's not the sharpest. I look for other parameters. I seriously don't care about 0.10% or 0.05% difference. I do care about 1.00% difference.

All lenders gradually increase the margin on the SVR and that lifts the real rate paid by existing borrowers, whilst they offer the best rates for new borrowers. It's like a reverse loyalty scheme, the longer you stay with them without complaining the more they walk over you. Everyone should look at their rates every year or two and see what can be done, and whether refinancing is worth the bother - sometimes it isn't, often it is.

UBank have a different model. They will only look at a refi deal sub 80% LVR so they don't offer an FTB product. They are looking for the highest quality deals. If someone has been repaying their loan well for some years and they are sub 80% it's clearly in the lowest risk category and requires the minimum of maintenance from the lender, which means lower staff costs. It's a low cost model that allows them to sneak in under other lenders, but not everybody wants what they offer or can meet their criteria.

Horses for courses.
Edited by Rufus, 24 Dec 2016, 02:13 PM.
Take risks - if you win you will become wealthy, if you lose you will become wise
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dachopper
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Rufus
24 Dec 2016, 01:53 PM
Well done. It usually does cost extra for an offset account, but if you use them well you will more than recoup that cost in interest savings and the big one "tax deductions"

Bank Australia 3.59%
QBank 3.78%
Teachers Mutual 3.79%
Heritage, Bank of Sydney, UniBank, ME, AFG and others all offering 3.79%

Then it really comes down to what are the ongoing fees.
Your broker really didn't bother looking, and of course he could have used the NAB.

To be honest when I look for a loan for myself I want a good interest rate but I don't care if it's not the sharpest. I look for other parameters. I seriously don't care about 0.10% or 0.05% difference. I do care about 1.00% difference.

All lenders gradually increase the margin on the SVR and that lifts the real rate paid by existing borrowers, whilst they offer the best rates for new borrowers. It's like a reverse loyalty scheme, the longer you stay with them without complaining the more they walk over you. Everyone should look at their rates every year or two and see what can be done, and whether refinancing is worth the bother - sometimes it isn't, often it is.

UBank have a different model. They will only look at a refi deal sub 80% LVR so they don't offer an FTB product. They are looking for the highest quality deals. If someone has been repaying their loan well for some years and they are sub 80% it's clearly in the lowest risk category and requires the minimum of maintenance from the lender, which means lower staff costs. It's a low cost model that allows them to sneak in under other lenders, but not everybody wants what they offer or can meet their criteria.

Horses for courses.
Yeah, I tried ubank once, but they don't lend to non residents, so now with loans.com.au, who do non resident.

They have the lowest rate, no regular fees, and only settlement discharge fee , and valuation bill.
The brokers need to be paid somehow, so makes sense that DIY will be cheaper.


I went to a free financial planning session once before I got into property. The guy there was trying to sell me shares in a managed fund. I asked about return and they said guaranteed 6% without fees. I then explained to him, with an investment loan at 6.5% - 7%, I would be loosing money..... he looked bewildered by my reasoning.....




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Foxy
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Zero is coming...

dachopper
25 Dec 2016, 10:53 AM
Yeah, I tried ubank once, but they don't lend to non residents, so now with loans.com.au, who do non resident.

They have the lowest rate, no regular fees, and only settlement discharge fee , and valuation bill.
The brokers need to be paid somehow, so makes sense that DIY will be cheaper.


I went to a free financial planning session once before I got into property. The guy there was trying to sell me shares in a managed fund. I asked about return and they said guaranteed 6% without fees. I then explained to him, with an investment loan at 6.5% - 7%, I would be loosing money..... he looked bewildered by my reasoning.....



Do lower rates allow you to pay more for the property?

When my cousin bought a property in 1975 he paid $18,000 for it, he paid it off in 3 years as a timber mill labourer.

never thought about interest rates....

i owe about $2.5m.

It annoys me.

Even with low interest rates.

Every week i pay the loan down and make extra payments.

It costs me about $22,000 per month. Including principal payments, and my average interest rate would be 6%...

That $250,000 per year would be nice to have in my pocket.

Also the principal payments are after tax dollars.

The game is so rigged i have no idea after playing it for 40 years now where to start explaining it to young players.

But basicly if the rump of humanity is involved they are being ripped off so bad that it is impossible to explain it to them.

Corruption and ignorance are close bedfellows.

A lambs neck and a butchers knife are never far apart.









http://www.afr.com/content/dam/images/g/n/2/1/u/8/image.imgtype.afrArticleInline.620x0.png/1456285515560.png
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Rufus
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foxbat
25 Dec 2016, 11:33 AM
Do lower rates allow you to pay more for the property?

When my cousin bought a property in 1975 he paid $18,000 for it, he paid it off in 3 years as a timber mill labourer.

never thought about interest rates....

i owe about $2.5m.

It annoys me.

Even with low interest rates.

Every week i pay the loan down and make extra payments.

It costs me about $22,000 per month. Including principal payments, and my average interest rate would be 6%...

That $250,000 per year would be nice to have in my pocket.

Also the principal payments are after tax dollars.

The game is so rigged i have no idea after playing it for 40 years now where to start explaining it to young players.

But basicly if the rump of humanity is involved they are being ripped off so bad that it is impossible to explain it to them.

Corruption and ignorance are close bedfellows.

A lambs neck and a butchers knife are never far apart.








So you owe $2.5M and it costs you $22,000 per month in repayments.
I'm pretty sure you have been boasting that you don't owe anything, why the sudden burst of honesty?

Anyway that's your problem and none of my business, but I will say that even though you are probably using commercial security you should be accessing money below 5.5% which would save you $1000 per month. Closer to 5% would be even better and it should be possible.
Take risks - if you win you will become wealthy, if you lose you will become wise
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herbie
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Musty: "i owe about $2.5m.

It annoys me.

Even with low interest rates.

Every week i pay the loan down and make extra payments.

It costs me about $22,000 per month. Including principal payments, and my average interest rate would be 6%...

That $250,000 per year would be nice to have in my pocket.

Also the principal payments are after tax dollars.

The game is so rigged i have no idea after playing it for 40 years now where to start explaining it to young players.

But basicly if the rump of humanity is involved they are being ripped off so bad that it is impossible to explain it to them.

Corruption and ignorance are close bedfellows.

A lambs neck and a butchers knife are never far apart.
"

FFS dude, ya sure ya not one a them third gen types born inta inherited wealth we reads about wot screws it all up right proper?
Edited by herbie, 25 Dec 2016, 11:23 PM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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Fisho74
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foxbat
25 Dec 2016, 11:33 AM
Do lower rates allow you to pay more for the property?

When my cousin bought a property in 1975 he paid $18,000 for it, he paid it off in 3 years as a timber mill labourer.

never thought about interest rates....

i owe about $2.5m.

It annoys me.

Even with low interest rates.

Every week i pay the loan down and make extra payments.

It costs me about $22,000 per month. Including principal payments, and my average interest rate would be 6%...

That $250,000 per year would be nice to have in my pocket.

Also the principal payments are after tax dollars.

The game is so rigged i have no idea after playing it for 40 years now where to start explaining it to young players.

But basicly if the rump of humanity is involved they are being ripped off so bad that it is impossible to explain it to them.

Corruption and ignorance are close bedfellows.

A lambs neck and a butchers knife are never far apart.








Average rate 6% why is it so high? My bro is paying low 4s for a commercial loan..
I was going to go with mortgage house but i see on their website the loan needs to be at least 300k. We are under 300 so i might have to keep looking. Some good replies coming through guys cheers 👍
Edited by Fisho74, 26 Dec 2016, 08:31 AM.
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Bardon
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Fisho74
23 Dec 2016, 12:01 PM
Cheer Rufus. That is the plan. The $ we are paying down are available and it needs to stay that way if we refinance.
A broker i spoke to said if you draw the money back off you cant claim it on tax as you technically paid the IP loan down then used the money for something else? Doesn't seem right to me.
I would go as far as saying that paying down a PPR loan is not good for your financial health.
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Nathan800
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Fisho74
23 Dec 2016, 09:12 AM
Thanks heaps for the replies. Seems theres no black or white answer. I know im never fixing ever again its cost me alot of money. We are both contractors. Im a bit suspicious of online applications. And yes paying the loan down as quick as possible is our goal its an IP and we rent but intend on moving into the house when its paid down.
Thanks again
I personally think that's a mistake.

You're going to cost yourself a lot more at some stage in the future, because you blanked out half of all loan products, and missed the best one.

I'm currently fixed, and with a year left, it's been a good decision so far, and unless rates suddenly drop to 3%, it will remain a good decision.
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Rastus2
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Bardon
27 Dec 2016, 11:08 AM
I would go as far as saying that paying down a PPR loan is not good for your financial health.
Depends on the person's habits really.

If you are the kind of person who is not great with money, and sees money in the (offset) bank account as too tempting to not spend on toys/holidays etc.. then simply avoiding the offset account and going a normal loan with flexible repayments to allow extra being put into it, thus paying down the principal faster, is probably the best way to go.

If you are the kind of person who can control urges to spend, but also is able to make snap decisions on investments that do not blow up in your face... offset is gold.
Shadow - Defrauded his Bank ? 2015 I have 9 different loans and my bank had no idea which ones were personal and which were investment. They had half of them classed incorrectly. When this change came in they asked me to tell them if any personal loans were incorrectly classed as investment, which I did, and they switched them to personal for the lower rate. They also had a couple of investment loans incorrectly classed as personal. They didn't ask me about those. So they stay on the lower rate too. Worked out pretty well. :)
Shadow - 2008 Sydney Median House Price 1.25M by 2014-2015

Shadow : I think this boom has already begun in several cities. My prediction :
Peak of boom: 2014-2015. Sydney Median Price: $1,250,000 Bottom of bust: 2017-2018. Sydney Median Price: $1,100,000

Shadow's Original 2010 House Boom and Crash prediction http://s836.photobucket.com/user/rastus22/media/shady-orig-2010-chart.png.html?sort=3&o=0

Shadow's attempt to edit his 2010 chart in 2015 and replace it with one that does not show a crash in 2013 http://s836.photobucket.com/user/rastus22/media/Screen%20Shot%202015-06-06%20at%207.12.52%20pm_1.png.html
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Foxy
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Zero is coming...

Rufus
25 Dec 2016, 08:04 PM
So you owe $2.5M and it costs you $22,000 per month in repayments.
I'm pretty sure you have been boasting that you don't owe anything, why the sudden burst of honesty?

Anyway that's your problem and none of my business, but I will
Edited by Foxy, 29 Dec 2016, 12:58 AM.
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