I am with commonwealth bank. The variable mortgage rate is 7.31 and I get a 1% discount. Now I am wondering, how often does this rate change and how do I check it? Does this only change generally in line with the RBA's announcements on the cash rate or can CBA change it whenever it wants? How often is it updated?
I read NAB's variable rate is 7.22, does that mean I could get an interest rate of 6.22 with nab? Or does that just mean nab would not provide a 1% discount? Instead they might only provide a 92 basis point discount resulting in the effective rate to be the same as my current cba interest rate?
Why do different banks have different variable rates and how do they calculate it?
Hi PB
Every lender has a different standard variable rate which they advertise on their website and in most National Publications on a regular basis.
What you have to bear in mind is a 1% discount from one lender might equate to a 0.85% discount with another because they have a lower standard variable rate.
Interestingly enough after the recent rate reduction Tuesday Anz have announced that they will review their SVR monthly irrespective of any action the RBA take in relation to the Cash Rate. As overseas funding costs increase the margin between the 2 indexes will increase.
In saying all of this the interest rate is probably the last question any long term investor should be concerned with as structure is far more important. The lowest interest rate does not mean the best product as there 101 considerations.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
propertyboy wrote:I am with commonwealth bank. The variable mortgage rate is 7.31 and I get a 1% discount. Now I am wondering, how often does this rate change and how do I check it? Does this only change generally in line with the RBA's announcements on the cash rate or can CBA change it whenever it wants? How often is it updated?I read NAB's variable rate is 7.22, does that mean I could get an interest rate of 6.22 with nab? Or does that just mean nab would not provide a 1% discount? Instead they might only provide a 92 basis point discount resulting in the effective rate to be the same as my current cba interest rate?
Why do different banks have different variable rates and how do they calculate it?
Generally speaking it moves in line with the RBA (that's generally speaking and due to funding coming from various sources is not always the case). However, as Richard mentioned, ANZ have publicly announced that they will internally decide on their Standard Variable Rate movements – will be interesting to see if the others follow suite.
Your discount of the SVR should remain intact for the life of the loan.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
propertyboy, to check you loans interest rate, go into netbank and select the view repayment details option for your account.
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