Swapping banks regulary?

[markw1]

Does anyone here swap around banks regularly depending on the interest rates they offer? Do banks dislike this or do they not mind?

[MoatMaster]

Switching banks incurs legal fees.
Also unless your lending position is strong you may have to fall back on a relationship built one day.
Personally I have found too much emphasis placed on rates - particularly as there isn't any great difference in rates.
Some of the cheaper rates have higher costs overall in the longrun.

[mortgage broker]

There was a time markw1 when this was a lot easier, especially when the banks were flushed with funds and would pay all your legal bills to take you on. In my experieance a lot of the time you will find the existing bank will match rates to hold on to their clients.

[muppet]

In my experieance a lot of the time you will find the existing bank will match rates to hold on to their clients.

Collusion rulz then.

ASB has just put up their 5yr rates to 8%.
Westpac's is still at 7.6%

So if I have my loans are at ASB and I want to refinance with Westpac at 7.6% then would ASB refinance back down to 7.6%?

But how long will Westpac stay at 7.6%?

Just like oil companies.
One moves upwards then they all move upwards.
One moves downwards then they all move downwards.

[mortgage broker]

muppet, Westpac will probably move by Monday, if they don't, it would mean that there is a big margin and ASB would probably try and match.

If you would have had all the paper work ready on Friday morning and they managed to get an approval to you then with no conditions, then yes there would have been a point in moving.

[muppet]

Thanks Hamish. I was only stirring.

I am surprised that Westpac wasn't the first to put their rates up.

[roseneath_rat]

I feel the only people who benefit from churn are the lawyers & brokers. Banks don't like it, believe it or not they want long term customers.

As an example I had a new customer who came to me 6 months ago, who last week decided to refinance away for a fractionally cheaper rate to the opposition. "Don't worry, we'll give you another call in 6 months when this rate expires." I felt like saying "don't bother" ... I won't be going out on a limb and going the extra yards to support a customer like that.

Muppet, you'll probably find over the last 12 months that ANZ & ASB have been sharing the honours of 'first up, last down' on interest rates. You are right though, there have been steady increases in long term swap rates so those fixed rates will inevitably rise to match.

[mortgage broker]

I know how you feel RR but you have to remember that for each of those price driven and often short sighted clients, you probably have a few loyal clients who value your advice.

[markw1]

Price has never been a factor in switching banks for us. The banks allowance on LVR's has been the main factor. We will swap around with the banks depending on which one will allow us to finance our next purchase as we personally are happy to go to LVR of 75%

[Wayne]

Collusion rulz then.

ASB has just put up their 5yr rates to 8%.
Westpac's is still at 7.6%

So if I have my loans are at ASB and I want to refinance with Westpac at 7.6% then would ASB refinance back down to 7.6%?

But how long will Westpac stay at 7.6%?

Just like oil companies.
One moves upwards then they all move upwards.
One moves downwards then they all move downwards.

I thought it was called competition? Collusion could be implied if they all changed at the same time. Mostly I think it is a game of who blinks first

[Exotic pumpkin]

The dealings between you and your bank is like a business relationship. Banks wouldn't like customers who come and go as they like. It could be costing them to have you, and if they know it, there won't be too much negoatiating power for rates and fees, etc.

From customers' perspective, I'd rate 'rates' at the lower end. Customer service and business relationship are way more important. Banks tend to try to keep long-standing customers and offer discounts to keep them if possible.

Agree LVR is a pratical issue to weigh up, but quite often, your own bank might be able to allow you to go above their LVR if they consider you a valuable customer.