Home Loans - Bank enticements.

Please note this sub-forum does not provide professional finance advice. You should seek advice from a licensed financial advisor.

To post in this sub-forum you must have made 100 posts or have Trust status or have completed our ID Verification.

If investing please consider our affiliate link for new accounts: Sharesies.

Forums › Finance and wealth management › Home Loans - Bank enticements.

trig42

5810 posts

Uber Geek

ID Verified

#214356 8-May-2017 12:30

Hi,

I am about to re-finance (sold an investment property, want to pay down some of the mortgage).

Last time we re-financed, the banks were falling over each other for our business - offering enticements (free TVs, Lawyers fees paid, cash).

Does anyone know of any doing anything like this at the moment?

We are quite happy to stay where we are, I'd just be using these to negotiate with them (there is a chance that we may have to pay a break fee as we are currently on a fixed interest loan). Before I call our bank, just like to have something up my sleeve.

eph

187 posts

Master Geek

#1777738 8-May-2017 13:13

I believe it's been changing a bit. I definitely got worse deal from the banks this year than I did a year ago.

"Over the last 6 months or so there has been a large change where the banks have moved from prioritising the growth of their market share to being more interested in growing margins. This in a lot of ways has been a result in it being harder for them to access capital especially in the wholesale markets.

The majority of banks now have clear pricing differences when lending on investment properties in comparison to owner occupied dwellings and in some cases small fees are now being charged. Obviously this is a big change to what we have got used to with large cash backs, TV’s and holidays being thrown out."

Taken from this blog. (Disclaimer: I've used his services in the past and believe that he knows what he's talking about)

KrazyKid

1238 posts

Uber Geek

#1777740 8-May-2017 13:16

Just fixed my home loan for 2 more years.

Westpac offered nothing in the way of cash, and maybe 0.05% off their published rates.

They did however match ANZ who was lower for the part I was fixing for 1 year

only a 100K loan though - might not have been worth their while compared to some loans you hear about

Cheers

sxz

761 posts

Ultimate Geek

#1777743 8-May-2017 13:19

Expect around $1,500 - $5,000 depending on how much you are borrowing.

$200k will get you around $1,500

$700k+ odd will get you nearer to $5,000. I've seen people get more, generally those with very good incomes, good equity, and good prospects for future business.

Wheelbarrow01

1723 posts

Uber Geek

Trusted

Chorus

#1777864 8-May-2017 15:18

trig42:

Hi,

I am about to re-finance (sold an investment property, want to pay down some of the mortgage).

Last time we re-financed, the banks were falling over each other for our business - offering enticements (free TVs, Lawyers fees paid, cash).

Does anyone know of any doing anything like this at the moment?

We are quite happy to stay where we are, I'd just be using these to negotiate with them (there is a chance that we may have to pay a break fee as we are currently on a fixed interest loan). Before I call our bank, just like to have something up my sleeve.

Do you have any other investment properties, and if so, has your bank said anything to you about lowering your overall LVR to fall under the current LVR rules?

The reason I ask is that my rentals were all bought prior to any LVR restrictions being imposed, and I recently enquired about selling one of them, and particularly how this works when the properties are cross collateralised. I was shocked when my bank informed me that if I wish to sell one of my properties, my remaining properties MUST be refinanced, and in doing so, they MUST fall within the new LVR rules, meaning my banker would make me pay them an additional $200k to reduce my lending on all my other properties to below 60% LVR (and 80% for my own home). Given that I'm not making anywhere close to $200k on the sale, this is clearly not going to happen.

The reserve bank publications I have read explicitly state there is no requirement for remaining properties to adhere to the current LVR rules in the event that one of a group of cross collateralised properties is sold. Nevertheless, my lender is using the new LVR rules as an excuse to shift the goal posts and reduce their exposure.

I just wondered if anyone else has come across this lately. I was only going to use the sale proceeds to pay down my own home's mortgage anyway, so they will get the money back one way or another.... My issue is that they want me to pay back around $235,000 upon the sale of a property which is only worth $165,000.

trig42

5810 posts

Uber Geek

ID Verified

#1777915 8-May-2017 15:46

^ No, we will only be left with the house we are living in, but this sale will bring us to about 50% equity in it (maybe a little more, depending on whose valuation you believe).

I really just didn't want to pay a break fee, and if I could have told my bank (Kiwibank) that xxx bank was offering the same rates, plus a $xx sign on bonus, they would waive any potential break fee (or match it if there is no break fee). Quite happy with Kiwibank, but happy to change for a better deal too.

sxz

761 posts

Ultimate Geek

#1777947 8-May-2017 16:59

Wheelbarrow01:

if anyone else has come across this lately. I was only going to use the sale proceeds to pay down my own home's mortgage anyway, so they will get the money back one way or another.... My issue is that they want me to pay back around $235,000 upon the sale of a property which is only worth $165,000.

No I haven't come across it, and it sounds unusual. I do know the 'first line' of lenders you come across have limited flexibility. You could be dealing with someone who is just ticking the boxes, and doesn't know how to do difficult stuff. You may need to escalate to a bank manager with more power...

Dunnersfella

4086 posts

Uber Geek

#1777988 8-May-2017 18:53

From talking to our mortgage broker, she commented that banks have not only tightened up on loans, bonus gifts / cashbacks are also starting to dry up. I wouldn't bank on anything more than a 'free' cellphone.

GoodSync

GoodSync. Easily back up and sync your files with GoodSync. Simple and secure file backup and synchronisation software will ensure that your files are never lost (affiliate link).

mattwnz

20152 posts

Uber Geek

#1777992 8-May-2017 19:03

Dunnersfella:

From talking to our mortgage broker, she commented that banks have not only tightened up on loans, bonus gifts / cashbacks are also starting to dry up. I wouldn't bank on anything more than a 'free' cellphone.

I think it is a good thing too that they aren't doing this. I suspect there are people who have used these 'free' gifts, as an incentive to get into the housing market, with some new house build deal. eg For a 4.75% p/a loan rate, for a $650k (if not more), 170sqm new house on a small 400sqm piece of land. The problem is when the rates start going up. Apparently the government has been concerned about this for a while, if rates rise http://www.interest.co.nz/property/87575/govt-has-been-concerned-some-time-about-risks-rising-mortgage-rates-%C2%A0house-price-boom

tukapa1

725 posts

Ultimate Geek

#1778748 9-May-2017 20:40

Just refinanced with ANZ last week - everything switches over this Friday.

$200k mortgage - got $1850 cash and 4.79% fixed for 3 years with the ability to pay off an extra 5% annually with no penalty.

Happy with that (otherwise I wouldn't have signed up).

JonnyCam

643 posts

Ultimate Geek

ID Verified

#1779083 10-May-2017 14:14

tukapa1:

Just refinanced with ANZ last week - everything switches over this Friday.

$200k mortgage - got $1850 cash and 4.79% fixed for 3 years with the ability to pay off an extra 5% annually with no penalty.

Happy with that (otherwise I wouldn't have signed up).

Similar to my Westpac offer on an investment property (actually for the Wife's mother to move into, but still classed as investment) got $1500 cashback / legal contribution with 5.05%

interest only for 4 years.

Disrespective

1925 posts

Uber Geek

#1779084 10-May-2017 14:21

How do incentives work when a mortgage is split into several smaller parts? One part of ours is coming up for renewal in a few weeks and i've been putting off getting it sorted for a number of reasons. I feel like I wouldn't be able to argue that this part of the mortgage would go to someone else if they don't give me some kickback as I still have another part with them anyway.

timmmay

20579 posts

Uber Geek

Trusted

Lifetime subscriber

#1779087 10-May-2017 14:24

Who needs TVs and such, just go for a good rate and no fees.

ASB offers something like 0.4% interest rate deduction off stock, you should get that easily with 50% equity. They're advertised on their page pubilcly as "special rates", they're lower than kiwibank.

trig42

5810 posts

Uber Geek

ID Verified

#1779089 10-May-2017 14:24

Thanks tukapa1 and JonnyCam - exactly what I was hoping for. I will talk to Kiwibank and see what they can do.

I am looking for a mortgage of around $400000 on a property with a registered valuation from a year and a half ago in Auckland of $800000. Shouldn't be an issue equity-wise.

ubergeeknz

3344 posts

Uber Geek

Trusted

Vocus

#1779106 10-May-2017 15:29

Dunnersfella:

From talking to our mortgage broker, she commented that banks have not only tightened up on loans, bonus gifts / cashbacks are also starting to dry up. I wouldn't bank on anything more than a 'free' cellphone.

This has been our recent experience too. It's not like the "good old days" it would seem.