My BDO home loan interest rate jumped from 5.88% to a whopping 9.8%

[user94]

Yesterday was the end of my 3-year fixed rate of 5.88%. I was surprised to find out this morning that the rate changed to 9.8%.
May I have your thoughts on refinancing the loan? I saw an ad from Security Bank offering 6.75% fixed for 3 years or 7% for 5 years.
If I negotiate my current loan, do you think BDO can bring down the rate close to what Security bank offers?
If I push through with the refinancing option, what other fees and documents do I need to prepare for? Thanks!

Update:
Thanks for all the comments. I was able to negotiate the rates... BDO reduced it to 8.5%.
I have applied to other banks for refinancing.

 

[217]

@user94 People who have replied to not do anything muat work for the banks. Why would it NOT be worth refinancing to a better rate?

If you can even get 7.0%, work out how much that will save you. Frankly, you would have to be a bit of a moron to just blindly keep on paying this. In the first year it will save you around P47,000. That is more than a couple of coffees. BDO are relying on lazy people to just not do anything and pay the ridiculous 9.8%

It is well worth you putting in the time and energy to find a better rate. Firstly, check out the BDO website for their current interest rates. According to them, it ranges between 6.75-8.00%, depending on 1-5 years. Call the bank up, tell them you want a better rate, as you can see what they are offering on their website, or you will be moving. If the call center person isn't getting you very far, ask to speak to a loans officer to help you cancel the loan. No, don't cancel it straight away, but this will get their attention and you can find out what you have to do to transfer or cancel the loan. Play a little dumb, it's okay. Banks hate people moving their loans. They have KPIs to keep and of a person leaves, this is easy money they have lost.

Next, do some research on other banks, not just Security Bank. I just looked up Metrobank and they even have a "Loan Transfer- Make the Switch to Metrobank" page. Their interest rates are 7.25-8.25%. Call them and talk to them. Before proceeding too far, ask them about any fees, etc. Look at other banks offer in interest rates and fees. Again, it is worth your time and effort to save easy money.

Another option is to contact a mortgage broker. I am not an expert in this, but a Google search came up with Nook Mortgage Brokers. They will find the best rate for you and do all the paperwork. Book a call with them and just see what they have to say.

Again, just do something. Good luck.

 

[lost_soul]

@217 Totally agree with this. If they are not very helpful, throw their slogan back at them - "We find ways". Sometimes a little sarcasm goes a long long way.

 

[wallflower04]

@217 Wow this is helpful. Thanks

 

[tonyquart]

@217 Great advise..i am in the same scenario..i am currently searching for other banks to refinance my mortgage..thanks for the great inputs.

 

[duanem]

@217 But aren’t there any bank fees associated when applying or a loan? Usually around 1-2 % of the loan amount. So the refinancing will seem logical if even after these fees you will still pay less.

 

[jacob2848]

@user94 OMG. Mine will end by January next year. Same 5.88% fixed rate. Holy cow

 

[nasa321]

@jacob2848 Imagine those who got multiple loans to buy "cheap" condos.

It's like investing at a negative interest rate.

 

[gregory95]

@nasa321 nice. possible condo market crash.

 

[brianblood]

@gregory95 Could happen on low-middle end condos. Unlikely on higher-luxury condos.

 

[gregory95]

@brianblood I can't afford the high end anyway. Just need a market correction.

 

[ccclove499]

@gregory95 Primary market wont crash since these large developers have huge warchests. If you see even now the huge price disparity between the primary and secondary markets

 

[dave1361]

@jacob2848 shit. mine will end in 2 years. baka umabot na sa 15% yun. wtf.

 

[nariski]

@jacob2848 Hey guys stupid question.....are all the rates in the Philippines for real estate like this or are there options for a fixed rate like in the u.s.? Cuz if not then this is fucced up

 

[vacrew]

@nariski You have option to fix your rate, bit with the current economy, rate will be high.
Back when Pnoy's time. Common loan interest rate is at 7.25% p.a. compared to now lowest you can get isat 9% i think

 

[prophecysocietyatlanta]

@nariski There are several options for the Fixing or Repricing Period. In general, banks have lesser options for this (compared to HDMF) and will always entice you to take a frequent repricing period but you can always ask for other options.

 

[matthew517]

@nariski If you fix it for the entire duration, prepare to pay 15%+ interest per annum. Or something like that.

 

[kirbdog20]

@nariski That's the way in Philippines.
And most of consumer loans are 4 to 6% per month... 48 to 72%per year.
Then those who practice those loans and impoverish Filipinos pretend to be philanthropist...

 

[mikenola504]

@user94 Same for us, ero nag ready kami, we did a lump sum payment upon expiry nung fixed interest. We borrowed from friends but we were able to pay our friends within 2-3 months din.

 

[dstrattenfan]

@mikenola504 Hi po! You paid off your loan amount prior the term ? pwede naman po ba yun? kumbaga ippay off nyo po lahat even for example may 3 yrs remaining pa?