I just reduced my mortgage rate by about 1% and yet the minimum payment has remained the same. Shouldn't it come down. I still want to keep paying extra and extra on that but shouldn't that be giving me more that I've paid off each week.
Need home loan advice
- Thread starter Beauy420
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Although your rate has dropped I believe payments stay the same unless you request to lower it. If you don’t lower it the extra money paid still comes off the mortgage but is available on redraw. I think that’s how it works.
Really?Although your rate has dropped I believe payments stay the same unless you request to lower it. If you don’t lower it the extra money paid still comes off the mortgage but is available on redraw. I think that’s how it works.
Our rate dropped and our payments did accordingly.
- May 20, 2014
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Just one of those things that is different bank to bank.
So the ridiculously low fixed rates will have a variable rate noticably higher them the actual variable rate at the prevailing time. Is that correct.
so if fixed rate is 2.2 percent today and expires in two years and in two years the standard variable rate is say 3.5 percent then i wouldnt pay 3.5 percent but probably something like 4.2 percent. Is that correct?
so if fixed rate is 2.2 percent today and expires in two years and in two years the standard variable rate is say 3.5 percent then i wouldnt pay 3.5 percent but probably something like 4.2 percent. Is that correct?
How can you lower your repayments?
Contrary to what some may believe, your home loan repayments don’t always automatically reduce in line with a reduction in your home loan’s interest rate. This usually happens on a case-by-case basis. For example:
- Bankwest (owned by Commbank) “automatically passes on the interest savings to the customers from the effective date of the interest rate change”
- But Commbank itself “proactively notifies customers if they are eligible to reduce their minimum repayment amounts” and it’s up to that customer themselves to contact the bank online, via phone or branch to inform them they would like to reduce their monthly repayments
Each of the big four requires the customer themselves to take the first step, according to responses given by bank representatives to the House of Representatives Standing Committee on Economics in November 2019.
Guju
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- Mar 18, 2019
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My mortgage is with ANZ and the repayments stay the same even when interest rates drop. I need to contact the bank if I want to decrease my repayments.
But when interest rates go up the bank automatically increases my repayments to match the rate.
But when interest rates go up the bank automatically increases my repayments to match the rate.
I don't think they can lock you into a higher variable rate. At the end of the fixed period the loan will default to some bullshit rate but a phone call and some negotiation should get you back on track.
Banks prey on people not paying attention. Everything is negotiable.
- May 5, 2006
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If you sign up for a fixed term loan then it will be fixed until said term ends. Chances are it will just revert to whatever their standard variable rate is, and anyone who has a standard variable rate loan is a fool. My bank's SVR is about 4.5%. You can get under 3% variable and the lowest fixed rate is about 2.2%. You can guarantee that some of their customers are paying the 4.5% out of apathy.
I've had loans with 3 banks over the last 10 years. Whenever a fixed period or an intro period ends, you shop around. And every so often even if you think you are getting a good deal you keep an eye on what other banks are doing. 0.5% on $300k is $1500 a year, so every little bit helps. Banks care about new customers and not old ones. Sometimes they will come to the party but never without a push.
I've had loans with 3 banks over the last 10 years. Whenever a fixed period or an intro period ends, you shop around. And every so often even if you think you are getting a good deal you keep an eye on what other banks are doing. 0.5% on $300k is $1500 a year, so every little bit helps. Banks care about new customers and not old ones. Sometimes they will come to the party but never without a push.
Mofra
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Yep - and then request a payout figure from your lender, and mention you are thinking of switching to a rival (and tell them who, and what that rate is).
Lenders have 'customer retention teams' that will call you and try and retain your loans with them. For not much effort, you may secure an extra discount off your rate without having to refinance. Even this year I managed a discount off two mortgages at the start of the year just by making a few calls and a little bit of research.
- May 5, 2006
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A friend of mine works for a bank in credit cards and similar (i.e. not home lending). I asked her why banks only prioritise new customers and don't give a s**t about existing ones and she shares the same frustration. It's a big missed opportunity.
I remember the first time I refinanced and my argument was the basic 'You are giving me 5% and offering noobs 4%, if I leave I can get 3.8% so give me the 4% please' (made up numbers) and their response was 'that will cost you $800 in fees'. The tellers seemed shocked when I told her that spending $800 once to save $2000 a year was a good deal.
I fixed with ANZ at 2.19% yesterday.
What baffles me is banks don't match the rate, they just let you walk away. It's cheaper to keep customers than it is to sign up new ones all the time surely
I think people should be fixing at low 2's. Reserve bank already said we won't go into negative rates and banks generally apply 2% buffer so it can't go much lower. You can't really lose fixing atm but others probably have differing opinions depending on circumstance
What baffles me is banks don't match the rate, they just let you walk away. It's cheaper to keep customers than it is to sign up new ones all the time surely
I think people should be fixing at low 2's. Reserve bank already said we won't go into negative rates and banks generally apply 2% buffer so it can't go much lower. You can't really lose fixing atm but others probably have differing opinions depending on circumstance
Fixed rates can have their limitations. Most don't allow offset accounts and have a maximum amount of "extra" repayments you can make per year. So if you're in a position to overpay on your repayments and your aim is to reduce as much debt as fast as possible, fixed may not suit.
Hi guys.
Just thinking of a few ideas. Thoughts on buying a modern 3 bedroom townhouse for about 325k in Brisbane? Would be a decent location, or at least somewhere I'd feel comfortable living in.
Renting a room in inner city Brisbane is about $200 a week, while saving/buying a house seems like such a long way off at the moment, anything nice and modern is in the middle of nowhere and anything in a reasonable location is either very expensive or looking very old, cold and ugly.
Would it be feasible to rent out a room in the townhouse for maybe $150 a week? (Not sure how that would like taxwise? or if it would be worthwhile?)
Current rent money, plus the potential of income from a flatmate, would surely making paying off a loan pretty straightforward.
Not sure at all, obviously being single, just back from overseas traveling, limits some options. I just don't like the idea of having to pay $200 a week rent for the next 4 years or so... Thoughts?
Just thinking of a few ideas. Thoughts on buying a modern 3 bedroom townhouse for about 325k in Brisbane? Would be a decent location, or at least somewhere I'd feel comfortable living in.
Renting a room in inner city Brisbane is about $200 a week, while saving/buying a house seems like such a long way off at the moment, anything nice and modern is in the middle of nowhere and anything in a reasonable location is either very expensive or looking very old, cold and ugly.
Would it be feasible to rent out a room in the townhouse for maybe $150 a week? (Not sure how that would like taxwise? or if it would be worthwhile?)
Current rent money, plus the potential of income from a flatmate, would surely making paying off a loan pretty straightforward.
Not sure at all, obviously being single, just back from overseas traveling, limits some options. I just don't like the idea of having to pay $200 a week rent for the next 4 years or so... Thoughts?
Did exactly this back when I was 19. Bought a townhouse in Mosman Park, Perth for $335k. Rented a room to a mate for $175 pw cash (obviously didn't declare) and had a absolutely fantastic time for 2 years while also making some really good capital gains. Sold it 2 years later for $440k after making some minor improvements
I was pretty much living off the $175 pw and I was on a pretty low salary at the time (no idea how I convinced the bank to lend me the money with a $5k deposit and $40k salary) so probably wouldn't recommend if you're working on similar numbers, though the interest rate was 6% from memory
If you'd be relatively comfortable with the money you have left after paying the mortgage and the location is somewhere you actually want to be then I like the idea
I would be looking at something less modern though You want to be able to add value down the track
You know what they say,
Location, Location, Location
Buy the worst house on the best street
Weiterbot23
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Rentvest!
Buy in the best growth suburb and rent a room with mates in a trendy suburb and enjoy the single life
The rent of a whole house will likely be more than the one room you'll rent in the ritzy suburb with your buddies. Plus more tax efficient
Buy in the best growth suburb and rent a room with mates in a trendy suburb and enjoy the single life
The rent of a whole house will likely be more than the one room you'll rent in the ritzy suburb with your buddies. Plus more tax efficient
boncer34
Formerly "Dos23"
The maximum in most is considerably high though I've found. Around 40%+ of the loan balance?
Where exaclty do you get a house for that price in a decent location im brisbane. What is your definition of a decent location?
Great appraoch when single and in your twenties. You really want to live where the action is at that age and can only do that through renting. It wont work once a woman ties you down though.
Well it would be a townhouse. Obviously wouldn't be innercity but I was thinking around Sunnybank/eight mile plains.I'm from the southside originally. Could maybe go out to as far as Runcorn or Springwood.
I haven't looked at anything to closely just yet, just brainstorming at the moment.
Ok that makes more sense.
- May 15, 2019
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do not get a home loan, that's the best advice you'll ever get
- May 15, 2019
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yes
