Wrote another post about a few things but getting great advice on how to structure new and current loans…so I thought I'd create a topic specfically on loan type.
I will be taking out a new loan for an investment property I have just purchased. It will be IP for 5 years before becoming PPR…and my current PPR will become IP.
Considering there is a good chance the lenders will be raising interest rates before the RBA makes a move…and rates are looking only up from here…is the consensus for a new loan for settlement in late October to be full variable, full fixed or split?
What I'm thinking is, it's around 2 to 2.5 percent difference between a discounted variable and a 5 year fixed loan today. That's a $12K gamble per year based on a $600K loan but decreasing depending on how much and quickly rates rise.
Gidday Noisuf,
Rate type is a part of the structure conversation and fixed rates are about buying certainty, not saving in interest, so you have the tiger by the tail.The price of this insurance is currently a tad higher than 2.09% p.a. assuming you grab and lock the NAB-Homeside rate at 7.09% or add 0.10% for NAB Retail. Next stop is 7.29% with Heritage…
I had a quick look at your other post which seems a little chaotic. You probably should discuss your underlying strategy with your accountant before you structure your loan as your objectives are a bit hit an miss. i.e. negative gearing is usually a side effect of an investment strategy rather than the heart of it.
The easiest thing for you to do would be to just take the ANZ pre-approval, but it's unlikely to be the smartest thing. The deal you have with them is kind of okay (@0.7% off, you should be on 5.11%), but you probaly should at or below the 5% mark on variable for an effective rate.
Depending on a bunch of factors you haven't listed (i.e. a clear map of income/liabilties), there should be no issue taking the the new loan with a different lender to ANZ, but again, you are way short on detail and this is probably not the place to post it.
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