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- How long does redraw take? Available 24×7? Cost of redraw? 100% approval (or chance of decline)?
- Are extra repayments unlimited?
- What are all the fees?
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Redraw vs Offset
Couple of interesting articles from whirlpool forum:
- Redraw or offset: posted 30 Oct 17
- Do I really need an offset or is a redraw as good? posted 17 Nov 16
| Offset Pros | Cons |
|---|---|
| Better liquidity: have access to funds straight away. Redraw may be delayed (depends on provider, eg UBank has a 3 business day wait) | Can be more expensive (either higher interest rate or extra fee). But can be negotiated with no extra cost |
| Better security: provider can remove redraw, but can’t touch money in offset account. Offset is real money, whilst redraw is available credit | |
| Simpler tax for Investment Property (IP): redraw spent on personal expenses are not tax deductible, and messy for accounting |
Conclusion
For IP, I think preference is for offset.
Comparison rate
What? A comparison rate is a rate that helps you work out the true cost of a loan. It reduces to a single percentage figure the interest rate plus most fees and charges relating to a loan.
Example
| Loan | Interest rate % | Fees & charges % | Comparison rate % |
|---|---|---|---|
| Home loan A | 8 | 0.5 | 8.5 |
| Home loan B | 8.25 | 0.1 | 8.35 |
Conclusion
The lower the comparison rate, the better. In eg above, Home loan B is better & cost less than home loan A, even though A has lower interest.
Home loan
20 Jan 2019
| No | Lender | Loan | Rate %pa (LVR 80%) | Comparison rate %pa | Offset | Comments |
|---|---|---|---|---|---|---|
| 1 | Well home loans | Well balanced | 3.49 (borrowing > 200k) | 3.53 | Y | Unlimited extra repayments?, redraw facility, offset with debit card, $250 application fee, $10 / month for offset account, $350 legal fee, $250 settlement fee, $300 discharge fee |
| 2 | Tic Toc (financed by Bendigo & Adelaide bank) | Live in variable | 3.57 | 3.58 or 3.7 (offset) | Y | Unlimited extra repayments, redraw facility, no ongoing annual / monthly fees, offset account $10 / month |
| 3 | UBank (belongs to NAB) | UHomeLoan | 3.59 (borrowing > 200k) | 3.59 | N | Unlimited extra repayments, redraw facility (anytime, no fees, min $100, redraw by 11am EST, funds transferred by 3 business days), no ongoing annual / monthly fees |
| 4 | HSBC | Home value | 3.59 (borrowing > 150k) | 3.61 | N | Unlimited extra repayments, redraw facility, $600 establishment fee, $150 settlement fee, $300 variation fee, no ongoing monthly |
| HSBC | Variable rate | 5.33 (borrowing > 50k) | 5.39 | Y | Unlimited extra repayments, offset account, $600 establishment fee, $150 settlement fee, $300 variation fee, no ongoing monthly | |
| 5 | Mortgage House | Lifestyle first refinancer special | 3.59 (borrowing > 150k) | 3.62 | Y | Unlimited extra repayments, offset account, establishment fee $495, no ongoing monthly / yearly fee, valuation fee $300, settlement fee $250, discharge fee $450 |
| 6 | SCU | My life variable | 3.59 (borrowing > 150k) | 3.63 | Y | Unlimited extra repayments, offset account, establishment fee $495, no ongoing monthly / yearly fee |
| 7 | Yellow Brick Road | Rate smasher | 3.64 | 3.64 | N | Unlimited extra repayments, no ongoing monthly / yearly fee |
| Yellow Brick Road | Empower | 3.75 | 4 | Y | Unlimited extra repayments, no ongoing monthly / yearly fee | |
| 8 | loans.com.au | Essentials | 3.64 | 3.66 | N | Unlimited extra repayments, no ongoing monthly / yearly fee |
| loans.com.au | Offset | 3.72 | 3.74 | Y | Unlimited extra repayments, offset account, no ongoing monthly / yearly fee | |
| 9 | Heritage bank | Discount variable | 3.67 (borrowing > 150k) | 3.72 | Y | Unlimited extra repayments, offset account, no ongoing monthly / yearly fee, application fee $600, valuation fee $330 |
| 9 | ING | Mortgage simplifier | 3.73 (borrowing > 150k) | 3.76 | N | Unlimited extra repayments, redraw facility, $299 settlement fee, valuation fee (ING cover $225), no ongoing monthly / yearly fee, everyday round up |
| ING | Orange advantage | 3.78 (borrowing > 150k) | 4.1 | Y | Unlimited extra repayments, 100% interest offset, no monthly fee, $299 settlement fee ($299 annual fee on anniversary of settlement), valuation fee (ING cover $225), everyday round up | |
| 10 | Beyond Bank | Special low variable | 3.79 (borrowing > 150k) | 3.79 | Y | Unlimited extra repayments?, offset account, no ongoing monthly / yearly fee |
| 11 | CUA | Achieve variable | 3.75 (borrowing > 100k) | 3.8 | Y | Unlimited extra repayments, offset account up to 15k, no ongoing monthly / yearly fee, establishment fee $600, security admin fee $195 |
| 11 | CBA | Extra | 3.79 (LVR 70%, borrowing > 10k) | 3.8 | N | Unlimited extra repayments?, redraw facility, no ongoing monthly / yearly fee |
| CBA | Standard variable | 4.87 (with wealth package, borrowing > 150k) | 5.27 | Y | Unlimited extra repayment, interest offset, no ongoing monthly / yearly fee | |
| 12 | ANZ | Simplicity PLUS | 3.81 (borrowing > 50k) | 3.85 | N | Unlimited extra repayments, redraw facility (no min amount, on business day usually in ANZ transaction account same day), no ongoing monthly / yearly fee |
| ANZ | Standard variable | 4.56 (borrowing 250k – 499k) | 4.95 | Y | Unlimited extra repayments, redraw facility, offset account, $395 annual fee (breakfree package: discount rate, fee free except breakfree fee) | |
| 13 | NAB | Base variable rate | 3.87 | 3.91 | Discounted rate, unlimited extra repayments, redraw facility, $600 application fee, no ongoing monthly fee | |
| NAB | Choice package | 4.39 (borrowing 250k – 749k) | 4.78 | Unlimited extra repayments?, redraw / offset?, $395 annual package fee, no ongoing monthly fee | ||
| 14 | Westpac | Flexible variable | 3.98 | 3.99 | N | Unlimited extra repayments, redraw facility ($25 redraw fee), no ongoing monthly fee |
| Westpac | Variable with offset | 4.58 (borrowing 250k – 499k) | 4.96 | Y | Unlimited extra repayments, offset account, redraw facility, $395 annual package fee, no ongoing monthly fee |
Investment loan
| No | Lender | Loan | Credit rating | Rate %pa (LVR 80%) | Comparison rate %pa | Offset |
|---|---|---|---|---|---|---|
| 1 | Mortgage House | Advantage investor | 3.89 | 3.92 | ||
| 2 | Tic Toc (financed by Bendigo & Adelaide bank) | Investment variable | 3.91 | 3.92 or 4.04 (offset) | Y | |
| 3 | loan.com.au | Smart Loan | 3.97 | 3.99 | ||
| loan.com.au | Essentials | 4.29 | 4.31 | |||
| loan.com.au | Offset | 4.37 | 4.39 | Y | ||
| 4 | UBank (belongs to NAB) | UHomeLoan | 3.99 | 3.99 | N | |
| 5 | Yellow Brick Road | Empower | 3.99 | 3.99 | ||
| 6 | CBA | Extra | S&P AA-, Moody’s Aa3, Fitch AA- | 4.09 (borrowing > 10k?) | 4.1 | |
| CBA | Standard variable | 5.45 (with wealth package, borrowing > 150k) | 5.84 | |||
| 7 | CUA | Achieve variable | 4.08 | 4.13 | ||
| 8 | Beyond Bank | Investment loan | 4.15 | 4.54 | ||
| 8 | Heritage Bank | 4.19 | 4.56 | |||
| 9 | ING | Mortgage simplifier | S&P A-, Moody’s Baa1, Fitch A+ | 4.29 (borrowing > 150k) | 4.31 | N |
| ING | Orange advantage | 4.24 (borrowing > 150k) | 4.55 | Y | ||
| 10 | IMB | Essentials home | 4.42 | 4.48 | ||
| 11 | ANZ | Simplicity PLUS | S&P AA-, Moody’s Aa3, Fitch AA- | 4.46 (borrowing > 50k) | 4.5 | N |
| ANZ | Standard variable | 5.16 (borrowing 250 – 499k) | 5.54 | Y | ||
| 12 | Westpac | Flexi first investment | S&P AA-, Moody’s Aa3, Fitch AA- | 4.48 | 4.49 | |
| Westpac | Variable with offset | 5.13 (borrowing 250k – 499k) | 5.5 | |||
| 13 | NAB | Base variable rate | S&P AA-, Moody’s Aa3, Fitch AA- | 4.65 | 4.69 | |
| NAB | Choice package | 4.95 (borrowing 250k – 749k) | 5.33 | |||
| 14 | SCU | Propack investment | 4.65 | 4.7 | ||
| 15 | Adelaide bank | Smartsaver | S&P BBB+, Moody’s A3, Fitch A- | 4.86 | 4.9 | |
| 16 | HSBC | Home value | S&P A, Moody’s A2, Fitch AA- | 5.34 | 5.40 | |
| HSBC | Variable rate | 5.95 | 6.02 |