Just with the rate cut we just had im thinking its time to refinance. My g/f for some odd reason fixed our rate @ 8.75% for 5 years back in Feb (only found this out a month ago) anyway, I want out of rams or whatever there called now.
Aussie homes loans put me onto this loan and it was good at the time but now banks rates are lower and I was just tolded by them to hold off untill Jan next year, do you think this is a good idea? or should I go for it now?
Anyone now of any other broker places in melb that are good as well?Thanks heaps,
Damian.The main issue will be that you will be up for hefty break fees – ie the difference between the fixed rate and the current interest rate – this may mean an extra $100k+. It is just like any other retailer, they do not have to accept your 'return of goods' for a refund unless they are faulty or are not fit for the purpose ie if you have changed your mind, they are the ones who would suffer the loss (of the income stream) and so will seek that compensation from you.
Just give them a call and find out the break costs and then do some calculations on how long it will take to recoup the costs. If it is an investment it may be deductible in the year of discharging the loan.
BTW – you must have signed something to take the loan out so don't blame your girlfriend too much!
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
IMO you're going to be absolutely hammered with interest costs not to mention rams' exit penalties
fixed rates will be 2% lower than what you're onI think you're stuck
Well.. didn't realise that so many buyers got sucked with RAMS…they must have the biggest commision among all the lender???
was the loan a joint one or not? If so, I am surprised that one of you could fix the rates without the knowledge of the other.
Well, what's done is done. how much does it cost to break? – just call them up if you don't know. it may be cheaper to break now than after the next round of rate cuts!
It will certainly be better to break the loan sooner rather than later, as the lions share of the break fees will be worked out on the difference between what you are fixed on, and the current market rates. That means the longer you wait, the more expensive it will get if the RBA drops rates again (highly likley).
There might be a middle ground, by breaking the fixed rate, but not leaving Rams altogether. I know you hate them, but it might be a good way to keep your monthly cash flow healthy, and not donate too much in fees.
The best way to find out is to call them, and get them to EMAIL or POST you an estimate on the fees. That way you will have written reference to it, and you can make an informed decision.
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