Sick of your current lender hitting you with ‘out of cycle’ rate increases but still want a variable loan?
Perhaps a ‘rate tracker’ mortgage is what you’ve been looking for.
The newly launched RBA Rate Tracker Home Loan by Auswide Bank and Equaliser Home Loan by Bankwest provide an opportunity to minimise the impact of out of cycle increases on your repayment whilst still giving you the flexibility of a variable home loan.
What’s unique about these loans?
Auswide’s Rate Tracker Home Loan promises to pass on any percentage rate changes implemented by the Reserve Bank in full. This means if the RBA slashes rates by 25 basis points, your Rate Tracker Home Loan interest rate will be cut by this exact amount, the same goes for any potential rate rises. And when you consider its current rate is just 3.99% (4.01%) you really are starting off on the right foot.
The Bankwest Equaliser Home Loan, for owner occupiers, comes with a variable interest rate that gives you a 1.51% p.a. discount on the average of the 3 major banks’ standard variable rates for the first 3 years of your loan term. It is presently priced at 3.72%p.a. (CR 4.19%p.a.).
What are the key features of Auswide Bank’s Rate Tracker Home Loan?
- Not only does the RBA Rate Tracker Home Loan promise to reward you in full with any Reserve Bank rate reductions, but you’ll also get that discount within 2 working days. When you consider that some banks take weeks to pass on RBA rate cuts, this really is a great value offering and could end up saving you some significant coin. But of course, keep in mind if there are any rate increases down the track, you’ll be hit with a speedy rate hike on your loan.
- The RBA Rate Tracker Home Loan is available to owner occupiers, who are looking to borrow up to 80% of the property’s value (loan must be over $150,000).
- When you sign up with this loan you’ll be charged a competitive 3.99% variable interest rate (4.01% comparison rate).
- It is worth noting that there are a number of fees payable at settlement. These include a $300 application fee, $302.50 legal fee as well as valuation & settlement fees charged at cost. You will, however, be charged $0 ongoing fees over the life of the loan.
- The Rate Tracker Home Loan offers popular features such as the ability to make extra repayments and a redraw facility, not to mention the option of a repayment holiday if you’re ahead on your repayments. But one thing you do miss out on with the RBA Rate Tracker Home Loan is an offset account.
What are the key features of Bankwest’s Equaliser Home Loan?
- You receive a discount of 1.51% p.a. off the average of the standard variable rates of ANZ, NAB and Westpac for the first 3 years (presently 3.72%p.a. CR 4.19%p.a.). However, a minimum rate of 2.50% p.a. does apply.
- Unlike Auswide’s Rate Tracker which utilises a fixed margin against the RBA cash rate, Bankwest’s Equaliser takes the average of the standard variable interest rates from ANZ, NAB and Westpac (calculated twice a month) and gives owner occupiers a 1.51% p.a. discount on that rate for the first 3 years. So for example, if the 3 major banks’ average standard variable rate dropped from 5.26% p.a. down to 5.01% p.a., when the Bankwest Equaliser discount is next calculated, its rate would drop from 3.75% p.a. to 3.50% p.a.
- Keep in mind that because the discount is calculated twice a month, there might be a delay before your rate drops. Contrast this with the Auswide product that promises to pass on changes within two days.
- The Equaliser Home Loan carries only a $250 legal fee at settlement with no other upfront or ongoing fees and provides important features such as the ability to make unlimited extra repayments free of penalty and an online redraw facility. It doesn’t, however, provide a 100% offset account.
- It is worth bearing in mind that Bankwest Equaliser Home Loan provides introductory pricing that is only available for the first 3 years of your loan. After that, the rate reverts to the Bankwest standard variable rate less a discount of 1.10% p.a. So currently, that’s 4.32% p.a. revert rate and 4.20% p.a. comparison rate.
- This loan is available to new owner occupiers borrowing at least $200,000, up to 80% of the property’s value.
Want to discuss how to structure your property finance?
You can combine the offers listed above with our $1000 eGift card promotion. The team at Naritas are experts in delivering timely guidance & we can provide you a high quality team of dedicated advisers to steer you efficiently through the approval process.