Banks doing the RBA's dirty work: Jason Khoury
GUEST OBSERVER
Who needs the RBA when the banks do their dirty work for them?
Westpac yesterday announced the increase to their variable rates by 20 points, for both owner-occupied and investment loans. If you have an investment loan at Westpac, your Standard Variable Rate will be 5.95%, so even if you're enjoying a lifetime discount of 1.15%, your rate will still be a whopping 4.80% (well, whopping in todays terms, my dad would yell at me if I called that whopping).
That rate's more than 60 points higher than it needs to be, even for investment lending.
Is it just Australia's first bank's turn to break the ice? Our eyes are now peeled whether other banks think they can also get away with it, given the recent regulatory changes and increased capital reserves banks must carry.
We'll certainly keep you posted, but I must stress its not the Standard Variable Rate that's so important but rather the lifetime discount you manage to get off that, which for home-owners was up to 1% a couple of years ago and up to 1.45% thesedays (for those who get a top-notch broker to go hard negotiating for them).
My team led by Victoria here at iChoice lodges dozens of pricing requests every week, delighting customers who had no idea what what they could get. It's a buzz.
The banks are offering all kinds of incentives for you to switch your home loan. Would you prefer $1,500 from Suncorp, $2,000 from St George or 250,000 Award Points from NAB? Personally, all else being equal, I'd take the latter - fancy getting two free return flights to LA for switching to a cheaper home loan!
NAB rates are fantastic and we can arrange a product with no annual fee ($10 per month instead, so let's call it $120 p.a) which gets you a Qantas credit card and a 100% Mortgage Offset Account. Please call if you want to know what rate you qualify for...it does take us 2 hours to confirm but you will be way impressed.
My handy hint today is about Land Tax. It's calculated on the investment land you own at midnight December 31st. So if you go to auction during November, see if you can extend settlement settlement till the first week of January, just to save a few bucks. Dont confuse it with CGT which is affected by the date you sign the contract.
On that note, November and December can be interesting months to attend auctions...good luck to those of you doing so.
Jason Khoury is principal, iChoice Mortgage Brokers and can be contacted here.
