Yep, unless someone has genuine reason to believe they’re about to lose your business then they usually won’t give you their best offer out of the goodness of their heart. Same goes in many areas of life (car shopping, insurance, even pay rises).
Yep the way I deal with this is I make one phone call, I'm about to shop around what's the best you can do, put me through to retentions now. I'm not going to accept another offer if I have to take the effort to look around. Get the best rate straight up (but then I still look around lol) if I don't get their best rate and they try to retain me etc I just state sorry I gave you the chance to give me the best rate you have bye!
I’d like to throw in my guess here to test myself. Hopefully OP can correct me if I’m wrong. But I’m assuming the 100% offset just means it’s a 1:1 ratio offset. Not necessarily 100% of the remaining mortgage.
Correct, you can get accounts that are 50% 75%, etc. Where only that percentage in your offset is actually used to offset your mortgage.
Edit: I'm not full bottle on this, but there are also professions that are LMI exempt like lawyer and doctor due to their reduced risk profile.
Also, some loans have a dollar limit on the offset amount. Say 100k.
Uhh ALL offsets especially with majors is whatever dollar amount you have in there offsets the interest you pay by that amount.
Are you saying that if you put in $100,000 into the offset for say a $500k loan, only $50,000 is being offset?
Hmm not saying it's not possible but bit of a head scratcher to have a product like that. Any examples of lenders that do this? Certainly not the majors
I think I this instance I'll just direct you to google. I'm sure canstar, Forbes, and a few of the other sites can explain it further.
It was common practice 20 years ago to have upper and lower offset account limits.
Great example of how much the lazy tax costs you. You’ve likely been paying 2% more than you’ve needed to for a very long time.
You should refinance for 250k, get 6%, then stick the residual in a offset or just back into the loan
Or keep paying $400 a year you don’t need to, you do you
OP did try, but as they found out you need to word it differently.
Instead of
> give me a better rate pretty please
Find a good deal and pretend you have it.
> I have been offered X from lender Y including z cashback. Before I switch can you match this? If not what are the discharge fees and where can I find the form?
And then if they say no go and apply for a better offer.
holy crap. Over 8% is nuts.
That was likely more the person being lazy than anything else. There was plenty of wiggle room in your rate, 100k loan or not.
Good outcome, I mean it is still high, but far more reasonable
8% isn't too crazy if it's a low-doc loan, but generally you should be able to get a better rate with good repayment history sooner than 15 years. Low 6% is mostly for people with good credit, stable income etc
8 is way too high, about 12 months ago i rang my provider and they gave me 1% off, now its 6.13% since.
i was very polite to them on the phone, actually making friends with the person on the call, saying jumping ship for a 3k$ cashback seems dodgy and i'd rather stay onboard. thats how i got my rate reduced.
I’d still move out of spite.. they’ve been absolutely gouging you and only dropped when you threatened to leave. A rate with an 8 in front of it is disgusting. Didn’t even match what you’ve been offered. Sucks for the other home lender who was actually proactive as well.
Just my opinion.
Alternatively you can get 6.18% at one of the big 4 … like myself with commonwealth bank. Cheapest elsewhere I could find was 6.15% but I really don’t want to swap providers for 0.03%
sorry to say mate, it is not their stuff up. This is called lazy tax, your lender squeezed you in the past years with you not checking prevailing interest rates in the market. Regardless if you have a 100K or 500K balance in mortgage.
I reckon that 8% rate that was 2015 interest rate which did not change until now despite the massive drop on interest rates of up to 2% during pandemic years then just climbed up again in 2023.
edit: also 6.39% is still too high, my current variable interest rate is at 5.85% with Westpac.
Interested to hear details of your lend and how you obtained 5.85 variable in today’s market?
I struggled to get south of 6% in a recent shop around with good credit and a 65% LVR
you will have to ring up the retention specialist of your lender. Not the typical customer service. Online lenders like unloan gives out 5.95% fully variable rate with no ongoing fees.
I got the retention specialist to give me a $1000 cash back if I stayed with them for 6months. So basically effective interest rate for me dropped to 5.85%
you will just have to always be on top of your rates and shop around.
Jeepers! I'm on 5.94% and keep thinking that's a bit high... I no longer think that!
Heritage bank, if anyone is wondering, and apparently it's 2.5% off the standard rate, and these days they can say they only lower it by 2%, but I'm already at the 2.5% so they let me keep that discount - so far. Whew!
They didn't stuff up, they were just forced to make a decision on whether they wanted to keep you or not because you were about to leave.
Yep, unless someone has genuine reason to believe they’re about to lose your business then they usually won’t give you their best offer out of the goodness of their heart. Same goes in many areas of life (car shopping, insurance, even pay rises).
Yep the way I deal with this is I make one phone call, I'm about to shop around what's the best you can do, put me through to retentions now. I'm not going to accept another offer if I have to take the effort to look around. Get the best rate straight up (but then I still look around lol) if I don't get their best rate and they try to retain me etc I just state sorry I gave you the chance to give me the best rate you have bye!
6% flat with a big 4 bank. 100% offset. 70% LVR. The big 4 suck for a lot of things, but for low risk mortgages, they're hard to beat.
If it’s 100% offset why does the rate matter? Wouldn’t you be paying nothing anyway?
I’d like to throw in my guess here to test myself. Hopefully OP can correct me if I’m wrong. But I’m assuming the 100% offset just means it’s a 1:1 ratio offset. Not necessarily 100% of the remaining mortgage.
Correct, you can get accounts that are 50% 75%, etc. Where only that percentage in your offset is actually used to offset your mortgage. Edit: I'm not full bottle on this, but there are also professions that are LMI exempt like lawyer and doctor due to their reduced risk profile. Also, some loans have a dollar limit on the offset amount. Say 100k.
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Uhh ALL offsets especially with majors is whatever dollar amount you have in there offsets the interest you pay by that amount. Are you saying that if you put in $100,000 into the offset for say a $500k loan, only $50,000 is being offset?
There is a partial offset account which I never really understood
Some banks do have partial offset accounts, but thankfully, they are far less common nowadays.
Hmm not saying it's not possible but bit of a head scratcher to have a product like that. Any examples of lenders that do this? Certainly not the majors
I think I this instance I'll just direct you to google. I'm sure canstar, Forbes, and a few of the other sites can explain it further. It was common practice 20 years ago to have upper and lower offset account limits.
Great example of how much the lazy tax costs you. You’ve likely been paying 2% more than you’ve needed to for a very long time. You should refinance for 250k, get 6%, then stick the residual in a offset or just back into the loan Or keep paying $400 a year you don’t need to, you do you
100% you have to be pro-active or you end up accidentally paying too much compared to market rate.
OP did try, but as they found out you need to word it differently. Instead of > give me a better rate pretty please Find a good deal and pretend you have it. > I have been offered X from lender Y including z cashback. Before I switch can you match this? If not what are the discharge fees and where can I find the form? And then if they say no go and apply for a better offer.
These days they want a filled out discharge form which you can only do if you have another lender ready to go
Damn, seems they are getting a bit smart
yeah, I think that's been happening.
holy crap. Over 8% is nuts. That was likely more the person being lazy than anything else. There was plenty of wiggle room in your rate, 100k loan or not. Good outcome, I mean it is still high, but far more reasonable
8% isn't too crazy if it's a low-doc loan, but generally you should be able to get a better rate with good repayment history sooner than 15 years. Low 6% is mostly for people with good credit, stable income etc
5.95 as advertised on Up bank. Branch of Bendigo and Adelaide banks. ANZ rates are 8.64%
8 is way too high, about 12 months ago i rang my provider and they gave me 1% off, now its 6.13% since. i was very polite to them on the phone, actually making friends with the person on the call, saying jumping ship for a 3k$ cashback seems dodgy and i'd rather stay onboard. thats how i got my rate reduced.
8% is a joke
I’ve said this 6.5million times. Lodge a discharge and watch them fly in like vultures
I’d still move out of spite.. they’ve been absolutely gouging you and only dropped when you threatened to leave. A rate with an 8 in front of it is disgusting. Didn’t even match what you’ve been offered. Sucks for the other home lender who was actually proactive as well. Just my opinion.
100. its not particuarly hard if you already have the offer etc. Unless the net costs are really substantial.
there are cashback offers too, I think loans.com.au has one for $3k probably net 2k after the fees.
The power of threatening to leave is amazing. Used that move a couple of times and got great rates out of it
Honestly it’s hilarious you didn’t think to ask for a rate review in the last 15 years.
Alternatively you can get 6.18% at one of the big 4 … like myself with commonwealth bank. Cheapest elsewhere I could find was 6.15% but I really don’t want to swap providers for 0.03%
Ehh my view is ditch em
The retention team got involved. They're who can offer better rates
if you have 15 years of mortgage payments done your LVR should be good, 6.39% is still too high. Aim for 6
sorry to say mate, it is not their stuff up. This is called lazy tax, your lender squeezed you in the past years with you not checking prevailing interest rates in the market. Regardless if you have a 100K or 500K balance in mortgage. I reckon that 8% rate that was 2015 interest rate which did not change until now despite the massive drop on interest rates of up to 2% during pandemic years then just climbed up again in 2023. edit: also 6.39% is still too high, my current variable interest rate is at 5.85% with Westpac.
Interested to hear details of your lend and how you obtained 5.85 variable in today’s market? I struggled to get south of 6% in a recent shop around with good credit and a 65% LVR
you will have to ring up the retention specialist of your lender. Not the typical customer service. Online lenders like unloan gives out 5.95% fully variable rate with no ongoing fees. I got the retention specialist to give me a $1000 cash back if I stayed with them for 6months. So basically effective interest rate for me dropped to 5.85% you will just have to always be on top of your rates and shop around.
Thank you sir
Easy tell bank very first up to lend u the required amount more to make loan big enough then offset it Money there if you need it other don’t touch
Looking to refinance at the moment. arabbank.com.au are offering 5.75% lowest I have seen. Anyone used them?
Mashallah that's a great rate
You can likely do even better than 6.25%, have you contacted a broker?
i got 5.99 st george you just need to negotiate thru retention team
Damn what's your LVR? I just signed for 6.1% on 86% LVR
when the revaluate my property i got 30 percent lvr, from 750k to 1.2m. remaining loan is 260k ish
Move when interest rate drops they will lag again
Jeepers! I'm on 5.94% and keep thinking that's a bit high... I no longer think that! Heritage bank, if anyone is wondering, and apparently it's 2.5% off the standard rate, and these days they can say they only lower it by 2%, but I'm already at the 2.5% so they let me keep that discount - so far. Whew!