Home Loans: AMP, HSBC and Resimac

[Dr Ralph]

Is the Ubank fully offset?

Nope. But I have no interest in that feature.

FYI. Neither is the CBA for the product I mentioned earlier.

 

[Cynicor]

Ah, no worries. Thanks.

 

[Freq Flier 2013]

It comes down to what features you need. Ie 100% offset, term of loan and if you need fee free accounts. Also if you get other benefits for business accounts.

 

[Buzzard]

Can't tell you the interest rate but Homelend (part of Bendigo Bank) have a 100% offset, fee free offering.

 

[2tall4Y]

An update on my situation - like my colleague, I was told existing ING Direct mortgage customers aren't eligible for the 3.99% Orange Advantage offer. So I applied and got approved for the Home Value loan with HSBC (3.99% with no annual fee), and after sending a discharge form to ING Direct, they relented and I'm now paying ING Direct 3.99% on the Orange Advantage product.

For anyone considering ING Direct, as part of the current offer they will waive the $199 annual fee for the first year and they also have a 'loyalty cash back' scheme whereby you get 1% of your monthly repayments of up to $3,000 (so up to $30/month) refunded as long as you deposit at least $1,000/month into the linked bank account:

Orange Advantage. 100% offset home loan - ING DIRECT

Given the current interest rate, as long as your loan size is greater than $315,000 the cash back scheme will 'pay' for your annual fee on an ongoing basis. Goes to show that comparison rates don't tell the whole story.

Indeed - it's a shame ING Direct aren't offering the 3.99% rate for their Mortage Simplifier product which has no annual fee. I've got the Mortgage Simplifier myself, and till now I have been able to get them match their best advertised rate, though a colleague in the same circumstances failed to get ING lower his rate to 3.99% just last week.

I'm also thinking of re-financing, and HSBC does look pretty attractive - I have the HSBC Qantas platinum card and used to have a bank account with them, and for what it's worth my (limited) interactions with HSBC have all been positive.

 

[mooingchicken]

Im looking around currently just FYI rates ive got for 400k
NAB 4.15% and either 250k velocity points OR $1500 cash (this will rase to 4.32% mid November) ($10 a month fee)
Suncorp 4.09% wave all package fee for life of loan (normally $350) + $1500 (no rate announcement yet)
ING (as above) 3.99% first year free additional $199

 

[Dr Ralph]

Im looking around currently just FYI rates ive got for 400k
NAB 4.15% and either 250k velocity points OR $1500 cash (this will rase to 4.32% mid November) ($10 a month fee)
Suncorp 4.09% wave all package fee for life of loan (normally $350) + $1500 (no rate announcement yet)
ING (as above) 3.99% first year free additional $199

Ubank is still 3.99%. No fees.

 

[mooingchicken]

Ubank is still 3.99%. No fees.

No offset account... however free withdraw so i guess its the same thing

 

[Dr Ralph]

No offset account... however free withdraw so i guess its the same thing

Yep. off set is useless. Just keep your spare money in your mortgage, save the extra money on interest and get the extra money back whenever you need it without any fees.

I've just refinanced a large mortgage with UBank. They are slow. But there were no problems.

 

[Mark3000]

Offset is useful though if you think your principle place of residence may get rented out one day and you want to get deductions for the interest. You can't pull money out of a redraw and still get deductibility, depending on what you redraw it for of course

 

[2tall4Y]

For owner occupiers, free re-draw can indeed provide exactly the same benefit (i.e. minimising the amount of interest one pays) as an offset account. It seems that this is a poorly understood point exploited by the banks (who charge extra for loans with offset).

For investors, who can deduct their interest expense against their rental income, offsets do provide a genuine benefit - a redraw balance (i.e. extra money paid onto the loan) will decrease the deduction an investor can make while I believe money in an offset account will not.

Yep. off set is useless. Just keep your spare money in your mortgage, save the extra money on interest and get the extra money back whenever you need it without any fees.

I've just refinanced a large mortgage with UBank. They are slow. But there were no problems.

 

[exceladdict]

off set is useless. Just keep your spare money in your mortgage, save the extra money on interest and get the extra money back whenever you need it without any fees.

I've found it has two specific uses, not that either would justify a yearly fee for me personally -

1) If you don't carry a large COH balance and your redraws cost money or have a high minimum value
2) If you can't be bothered transferring money to/from your home loan itself

My broker suggested that "offsets are a bad idea. They make the money appear more easily accessible, and reduces the theoretical barrier to spending. The action of making a redraw makes you think twice about taking money out of your home loan. That's a good thing to need to think twice about if you want to pay off your home loan sooner"

 

[medhead]

For owner occupiers, free re-draw can indeed provide exactly the same benefit (i.e. minimising the amount of interest one pays) as an offset account. It seems that this is a poorly understood point exploited by the banks (who charge extra for loans with offset).

For investors, who can deduct their interest expense against their rental income, offsets do provide a genuine benefit - a redraw balance (i.e. extra money paid onto the loan) will decrease the deduction an investor can make while I believe money in an offset account will not.

My Offset account reduces the interest charged to the loan each month. That will reduce the deduction available to an investor.

On the question of usefulness, I cycle money in and out of my off set account on a weekly basis. I maintain a full set of distinct accounts, some are available via cards, and others are not. General usage account available via card is used for everyday operating, paying people receiving money. Money then transferred from there to the off set account. Credit card paid from a line of credit which is then receives money from the off set account. Loan redraw would be a complete pain. Not to mention loan redraw is not available for the full amount that I'm in front on the mortgage. As part of a package, there is no difference in my annual fee.

 

[Pele]

Gday

I am amazed at the low level of support expressed for offset accounts. In my opinion anyone who has a mortgage on their principle place of residence should think of an offset account as the greatest free lunch they will ever get. And if my broker ever tried to convince me that offset accounts are a bad idea i would sack them on the spot.

The other key point is that offsets and redraws are not the same. Offsets are your money sitting in a bank account. Redraws are the banks money. Big big difference.

Pele.