5.44% Repayment rates on house Bonds

[Bob]

When you get to Australia, I guess sooner or later you'll want to find a place of your own which you can call your own.

You'll find yourselves hunting for the best home loan (bonds or mortgages) in town.

Well . . . . you may not know about the 5.44% interest on a home loan (bond) from M E Bank.

That's right!

5.44%

http://www.membersequity.com.au/personal/h...s/eligible.html

There is no 'establishment" fee to set up this sort of home loan . . . . unlike the other banks. I paid $600 (R4 000) back in 1994 to get my home loan "established" with the Commonwealth Bank before getting a single penny in the form of a loan to build my house.

There is no ongoing 'account keeping" fees and charging which are common to home loans given by the other banks in Australia.

If you're one of those folk who are paying more than this amount on your home loan, then quite frankly, you haven't got all the home loans and the facts in front of you and done the sums.

Think about it.

On a typical $300 000 home loan, would you rather be paying 1% more interest each year ??. . . . $3 000 (R20 000)???? . . . . with $8 (R50) a month extra to pay on top of the interest in "account keeping" charges for the length of your loan (20 years usually) . . . . another $96 (R650) a year!

Do yourselves a favour and compare the interest rates and fees / charges attached to each and every home loan in town

. . . . . or pay thro the nose for the next 20 years!

Over the term of a normal home loan (20 years) that can add up to R20 650 x 20 = a whopping R413 000 in extra interest and charges on a $300 000 (R2 million) loan.

Do the sums for yourselves!

[Jordy]

Bob, in South Africa the banks charge different customers different rates. The basic interest charge is called prime, which is reserve bank interest rate plus the bank's profit interest portion. So if the reserve rate is 7%, the banks charge 3.5%, then the prime lending rate is 10.5%. Now depending on the deal you can strike and your credit history etc etc you can get prime minus one or two percentage points.

Do Aus banks charge different rates for diff customers and is the rate negotiable for diff customers within the same bank?

[21yearsoutofrsa]

Banks in Australia will charge different rates for different customers.

The most basic is a loan over $250k will get a .7% discount by a couple of banks.

Certainly I was able to get a "sweetheart" rate from my bank of 1.5% less than the normal rate for the first year and then .8% below thereafter.

When I moved, the bank I was at tried to retain me with an additional discount to their rate. My credit history in Austrilasia was very very good though and had been built up over a lot of years.

[Bob]

I haven't scrolled thro the home loan market for many years now, but the main banks were all offering pretty much the same deal for their customers.

The Commonwealth Bank offered a slightly lower interest rate, back in 1994, for loans $50 000 +

You can always try to get a better deal with your local bank manager, but the main thing is to do your homework and DON'T sign your life away for a home loan with any fees and monthly charges and an interest rate greater than 5.44% per annum.

You know now you've got a home loan deal offering this amount, so go shopping and show the local bank manager what M E Bank can do for you and get a better deal than that . . . . if they mean business and want your business.

Lastly, don't get sucked into signing your life over on a "sweetheart" interest rate that's low for only 12 months, etc. then goes back to a normal interest rate greater than 5.44% for the next few years!

Those sort of short term sweetheart deals are just to get the suckers to sign on the dotted line!

Happy Home Loan Hunting!!