Is there a way to calculate break fees for a given loan, or do you simply have to ask the bank? I have two separate loans with one lender (1 for IP and 1 for PPOR) and am considering refinancing to better suit 2 salaries looking for longer term property investment. These 2 loans are both very basic P&I loans fixed at around 7% until Sep 2009. Looking at both loan schedules there are 'break fees' if the loan is paid out during the 'fixed' period, with a complicated algorithm listed.
Basically I am trying to weigh up refinancing now so we can invest in 1 or 2 more properties in the next 12 months, or waiting until the fixed interest period is over before we refinance. Any hints or tips much appreciated.
Are you sure you want to refinance rather than just use the available equity to move forward.
Unless there is a real problem i am not sure I would be refinancing a 7% fixed rate loan.
Get your mortgage broker to explore all of the options before you do take that course of action but if it is absolutely necessary then yes your lender will give you a payout figure.
Richard Taylor | Australia's leading private lender
If I just use the available equity and not refinance, what would that involve? Wouldn't I still have to get an advance on the current loan(s) with my bank to get to the equity and therefore they would have to setup a new loan schedule at the current interest rate etc, plus charge me some fees?
Jonty
It is hard to advise you what is involved without a bit more information .
In essence you would take out a new loan against the equity on both properties and use this to ocver the deposit and acquisition costs for your new IP loan.
As to how to structure it as mentioned without all the information it is hard to make comment.
Drop me an email if you need any specific information.
Richard Taylor | Australia's leading private lender
Thanks Richard. Will do
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