Hi
I’ve approached my bank about changing my interest from variable to fixed for the next 1 year. I decided on fixed for 1 year as it is infact a less rate than fixed interest for 3 years. Apparently I can continue with fixed after the year is up if I choose to. There is a clause that states however that there is no redraw facility on fixed interest rates. Does anyone know if this is pretty standard or whether there are any banks out there that offer the redraw facility with fixed interest rates? Would it therefore be wise for me to redraw $10k I have as extra repayments and use it as a deposit for another IP?
Many fixed rate loans don’t allow redraw. However, there are a few lenders that will allow redraw and a small amount that will give you an offset account with a fixed rate.
Cheers
Stu
Yeah pretty standard stuff, take it out if you want to access it in the next year. Remember break costs are payable in fixed rates if you want to get out of them. It’s no surprise to us brokers the one year rate is lower then a 3 year, as fixed rates are indicative of what the longer term market will be doing.
Heritage building society offer extremely flexible fixed rates and have no rate locking fees. Their fixed rates go up tommorrow though…
Liz
Mortgage Lender
1300 780 826OK I have the new Heritage rate. 3 years 6.89% very flexible product too…
Liz
Mortgage Lender
1300 780 826Hi Maria
I think you can do better than 6.89 fixed. It just seems a bit high to me. Look around to see what you can find.JULES1
Email MeThe lender with the cheapest 1-year fixed rate may not necessarily be the right choice,
Focus more on the long term, i.e. what is the revert rate after the 1 year fixed period expires, does this lender have the products & policy that will accommodate my investing strategy, Cheers.Regards
Steven
Mortgage BrokerMobile Mortgage Market
Ph: 0402 483 216
[email protected]
http://www.mobilemortgagemarket.com.auPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
Another good thing to look for is no restrictions on extra repayments. If you know you will have extra funds to put into your loan, it might be better to pay a little bit more in the interest rate to have the benefit of being able to reduce the loan amount as much as you want without penalty.
Having said that, many lenders will let you put in up to an extra $10,000 a year which is more than enough in most cases.
Robert Bou-Hamdan
Mortgage Adviser
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