Hi,
i was wondering,
at the moment i'm on a fix rate of 8.49% for 3years, since May 2008, till now is about .5 so what's left is 2.5yr.(with 194k owing at the moment)
i've check if i were to break the contract and go variable now is going to cost me $17,700.anyone know of a formula on how to calculate the differences, to how they come about in the figure, or how much i save. or i'm not saving anything at all if i break the contract.?
the upcoming rate drop, not sure by how much,but the lower the drop, the more costly the breakup is.
not sure if i should break or not.thanks
The longer you leave it the more expensive it will become – if rates are still going down. plus you are paying more interest in the meantime. Look at your loan documents, the formula may be in there somewhere, if not ask your bank how do they calculate it.
If it is an investment property, you should be able to claim the costs (which may help a bit!) – and i think you could claim it all in the year it is incurred.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
the property is not for investment. i'm currently living in there.
yeah i remember the formula
(A –
x C x DA= borrowing rate originally fee
B= Investment swap rate
C = remaining fixed Period of Loan
D = Current Loan Principals,what i dont' know is how to calculate my current rate, so i can compare with the variable rate, to see how much i'm paying per annum with each Rate, wonder if it is worth switching from Fixed Rate to Variable Rate now, considering the breakup is $18,000
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