There has been a lot said lately in Newspapers, TV, and radio about the Big Four Banks increasing interest rates outside of the Reserve Bank cycle, and whilst I am not one to defend the Big Four Banks, they are not the only Lenders to increase their interest rates. The following are the increases in interest rates in the last week:
Lender Increase New Standard Variable Rate
ANZ 0.06% 7.36%
CBA 0.10% 7.41%
NAB 0.09% 7.31%
Westpac 0.10% 7.46%
Bankwest 0.10% 7.30%
Bendigo 0.15% 7.45%
Adelaide 0.15% 7.45%
ING Direct 0.10% 7.42%
St George 0.12% 7.40%
This is not an exhaustive list, but it is an indication that it is not only the Big Four Banks that have put up their interest rates, and I guarantee that the majority of other lenders will follow when the dust settles. Yet the Media only sensationalises against the Big Four. I am also concerned when our Federal Treasurer comes out and tells everyone to move away from the big four and go elsewhere when the majority of Lenders will increase interest rates. You must do your research before you move. Even though the Federal Government has stopped the Banks charging exit fees when you move banks, this only relates to new loans since the legislation has been passed. All existing loans prior to the legislation still have exit fees. You also need to take into account State Government Charges to release your mortgage, take a new mortgage, plus a search fee, and the bank can also charge a settlement fee. Also if you do not have 20% equity in your property when you move, you will have to pay another Lenders Mortgage Insurance fee, because the Government will not make the Lenders Mortgage Insurers transfer the insurance when you move banks, and that can be as high as $10,000. So when the Treasurer says move your loan, it is not so simple.
The media also is making a huge error in only reporting the standard variable rate. If you are on the standard variable rate, you are being ripped off. The Majority of banks give a discount off the standard variable rates from .5% to .9% depending on the Bank. The Bank that has a higher standard variable rate but has a higher discount, could end up being a better deal. Don’t rely on your bank to offer you their best discount straight up, because they don’t always offer you their best deal. It is a complex area when dealing with interest rates, people don’t always compare apples with apples, so you need to talk to an accredited finance broker, to sort the apples out from the lemons. A finance broker does not work for the bank, they work for you, and believe me, get a lot of satisfaction in getting the rate that best suits their client’s needs.
If you’re looking to discuss a mortgage matter, you can contact John Whitten on 0749722081 or 0410433919. John is a credit representative (CRN 399796) of BLASSA Pty Ltd (Australian Credit Licence No 391237).