There’s been a bit of doom and gloom concerning home loan interest rates on the telly lately. Various commentators and banks have been saying things have to tighten up sooner, rather than later.
In defiance of the doomsayers, I can assure you the horse hasn’t bolted. Sure, there’s been a little up and down movement here and there, but borrowers who feel stuck with their uncompetitive loans have plenty of choice. By now, you’ve probably heard of the Loyalty Tax. It’s becoming a rather hackneyed term, but aptly describes staying with one bank year after year for no reward. It’s not just no reward. It seems almost like a punishment. Once or twice a year, you might get a letter from your bank detailing some woe story of higher lending costs. You can cope with a rise of 0.12% and you chuck it in the bin because you’re busy.
But wait! With two such letters a year over a 5 year period, you’re subsidising ever-bigger discounts used to entice new borrowers.
How do you fix that? Become a New Customer yourself. 2 year Fixed Loans for owner-occupiers are easily sliding beneath the 2% barrier. Here’s a selection based on a loan amount of $350,000 with at least 20% equity in the home.
- 1.79% PN Bank
- 1.84% ING
- 1.88% AMP
- 1.89% Bankwest
Basic Variable loans for the same customers are plentiful in the low to mid 2% region.
- 2.29% AMP
- 2.29% Citibank
- 2.34% Teachers Mutual Bank/Unibank/Firefighters Mutual Bank
- 2.34% PLAN Lend
Investors aren’t forgotten. Beyond Bank has a Basic Variable Investment Loan at 2.59%. There is absolutely no need to be paying 4.5% on your variable investment loans.
Complications can arise, naturally. It all boils down to some very fine calculations on affordability, fees, personal circumstance and product suitability. There are terms and conditions, naturally. Call your broker soon to discuss your options.