Concerning isnt it when your Bank Manager tells you that offset and redrawn are the same thing.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I've been called the past few weeks by my bank manager at Rams saying there is a pretty good deal on at the moment with switching part or all of my loan to a fixed rate. My current P&I variable is 7.13% and the 12 month fixed is 6.3%. Will cost me $ 295.00 to switch and save me $186.75 a month
I know nobody is a fortune teller and rates will probably come down in the next 12 months but some circumstances have lead to me looking at every dollar more closely and the certainty of the fixed repayment is a + as well
Any thoughts?
Hi All,
Just wanted your thought on 6.25% for 1, 2 or 3 yrs fixed with Citibank … no application charges, Citibank covers $500 cost for valuation & currently also offer $1000 cash back for taking up the offer. I currently have an investment loan with Bankwest on 6.78% with no exist fees. Question is – historically, how low has fixed rates been in the past as I’m quite keen in taking up the offer for 3 years as in the long run; I don’t foresee rates to be sub 6% … your view pls.
Cheers !
It’s good service that your RAM manger has given you a call.
But to be honest this 12 month fix rate is more of a “bait’.
1. Rates is unlikely to go up…in fact it will stay the same or come down
2. 6.3% for 12 month is a very poor rate in term of” fix rate pricing” …when you compare fix rate, you need to compare it to another fix rate as well NOT just the variable.Under 6.3% for 1 year fix is on offer with most banks + one bank is offering 5.99% for 1 year fixed!!!
3. 7.13% variable after the fix is also average , it’s ok if that’s the CR rate as well ( ie basic loan, no fees) but it depends also what features it provides….but yea 7.13% Var is so-and -so….
Remember your loan is not a short term loan, your going to most likely keep it for 3+ years??? so 7.13 for the next 2 ??
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Earlier this year I set about restructuring my existing loan i.e. P & I to I/O loan, applied and had approved two other seperate loans (facilitated by a broker) and stayed with the same lender. Purchased 1st IP in June, looking very closely at another property under a SMSF shortly
Was able to wrangle a 0.9% discount (off the std variable rate) for the life of the loans.Was very happy with that
I am getting 5.2% but it is a fixed loan, which we got 2 years ago. We don't have as much debt though – only $270k!
Hey Marie,
Fixed rate of 5.2% is very good in my personal view as most fixed are currently around 1% more than that. How long is your fixed & whom are you with? For your info, I’ve got a couple of loans with CBA @ 6.81% (just got the 1% off today), another with Bankwest @ 6.78% and another with Adelaide Bank @ 6.74%.
Currently, am in the market to refinance my Bankwest loan as the exist cost (inc. gov & discharge fee) is around $480 and may go for a 2 year fixed at around 6.25%.
Cheers’
PfPMarie123 wrote:I am getting 5.2% but it is a fixed loan, which we got 2 years ago. We don't have as much debt though – only $270k!5.2% is really good. Is this with a bank or non lender?
Hey propertyboy,
which bank is that with? I am with BOQ with 6.96%. Could have gone to CBA & NAB for 6.85% but was not worth the hassel for changing the loan & have to build new relationships with bank people. plus is not all abot the interest on the loan but all the extra fees some banks try to slug you with.
Lefty
Ultra Property wrote:Marie123 wrote:I am getting 5.2% but it is a fixed loan, which we got 2 years ago. We don't have as much debt though – only $270k!5.2% is really good. Is this with a bank or non lender?
They said they got it 2 years ago which was average then. Friends of mine are on 4.99% from then, about to come off.
I’m with Commonwealth Bank and I recently negotiated a further decrease on my loan. I’m now on 6.61% which I think is 1.14% below their standard variable rates. I’m happy with this but it’s not out of the question to fix part of it if I see a really good deal!
DenEPI_Den wrote:I'm with Commonwealth Bank and I recently negotiated a further decrease on my loan. I'm now on 6.61% which I think is 1.14% below their standard variable rates. I'm happy with this but it's not out of the question to fix part of it if I see a really good deal! DenHow did you negotiate this? Do you have significant amount of debt with them and high income?
Shape wrote:Mr and Mrs Propertyinvesting lives at home and has a IP worth $300,000, they plan on buying a PPOR to live in very soon + get married and buy some shares. 1. Redraw—- You have a $200,000 Investment property Mortgage with $50,000 cash you decide to chuck this cash into the mortgage…so the mortgage is now $150,000 ( + 50,000 redraw) – you pay % on the $150,000 and the % is all fully tax deducible …2 years later… You find your PPOR and decide to redraw the $30,000 out for deposit towards the PPOR —- your initial mortgage is NOW $180,000 BUT only 83% is tax deducible ( 150/180) SO now when it comes to tax time you need to work out the % for every split and every % repayment. Might sound simple…but lets add the MARRIAGE cost into this + cost to buy shares??? ( some tax deducible so not) — WILL GET MESSY 2. Offset– SAME EXAMPLE. $200,000 Mortgage with $50,000 Cash in the offset account…you still only pay % on the $150,000…but the "mortgage" amount does not change it remains at $200k. When you use the funds from the offset account it does NOT affect the mortgage "amount" and the tax deducibilty remains intact.But they could get of this problem realtively easy though couldnt they?
For example, in 2 years should they want to spend the 50k on a car or pay off the loan for the principle place of residence, couldnt they just refinance and essentially "clean up" any contamination. By this I mean, take out their 50k (spend it), get a new 200k loan with an offset account? Now the full 200k can be used for deductions. I understand it can be a hassle but if you have a redraw its not the end of the world, you can still clean up any contamination by refinancing (assuming you can still get that amount of debt and banks still have same appetite).
I understand previously this may have been difficult with refinancing costs but given that its relatively easy to refinance, its not that much of an issue is it if you were to get a redraw. Or is it? Essentially, my question is, you can fix the issue by just refinancing.If you do it early you could + enough paper proof for the tax return.
Your accountant and maybe even the ATO might not like it.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
EPI_Den wrote:I’m with Commonwealth Bank and I recently negotiated a further decrease on my loan. I’m now on 6.61% which I think is 1.14% below their standard variable rates. I’m happy with this but it’s not out of the question to fix part of it if I see a really good deal!
DenThat’s 1.2% off their SVR! nicely done…
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
EPI_Den wrote:I'm with Commonwealth Bank and I recently negotiated a further decrease on my loan. I'm now on 6.61% which I think is 1.14% below their standard variable rates. I'm happy with this but it's not out of the question to fix part of it if I see a really good deal! DenThat's a very decent discount.
We negotiated a 1.06% discount with WBC the other day – $700k+ sub 80%
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi, yes was a while back. We have it until middle of next year with St George Bank.
I am on 1.3% Discount with Anz but initially that was borrowing of over $9M and a 50% lvr.
Thankfully now it is down to $1.3M and a 7% LVR but they have maintained the margin.
Will be all gone in a year anyway unless i decide to buy more.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
propertyboy wrote:EPI_Den wrote:I'm with Commonwealth Bank and I recently negotiated a further decrease on my loan. I'm now on 6.61% which I think is 1.14% below their standard variable rates. I'm happy with this but it's not out of the question to fix part of it if I see a really good deal! DenHow did you negotiate this? Do you have significant amount of debt with them and high income?
Hi mate,
Really I just shopped around a bit and then went back to CBA. I have a significant amount of debt (and over 10 investment properties) but not a large income. I might write a blog about it and let you know where to read it.
Don't be afraid to shop around!!
<br /:)” title=”>:)” class=”bbcode_smiley” />
DenEPI_Den wrote:propertyboy wrote:EPI_Den wrote:I'm with Commonwealth Bank and I recently negotiated a further decrease on my loan. I'm now on 6.61% which I think is 1.14% below their standard variable rates. I'm happy with this but it's not out of the question to fix part of it if I see a really good deal! DenHow did you negotiate this? Do you have significant amount of debt with them and high income?
Hi mate,
Really I just shopped around a bit and then went back to CBA. I have a significant amount of debt (and over 10 investment properties) but not a large income. I might write a blog about it and let you know where to read it.
Don't be afraid to shop around!!
<br /:)” title=”>:)” class=”bbcode_smiley” />
DenHi Den,
Thanks for the update and could I ask if you have all your properties crossed in order to get the 1.2% discount?
Look forward in reading your blog about it and thanks for the advise about shopping around.Cheers’
PfP
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