Can I get a loan ?

Oh and the comparison rate my current variable rate is 7.11%.

Unlikely up, but could be flat, has been for a while

Based on the comparison rate, my current variable is lower than the one of fixed rate. Does that mean in term of real cost, my current one is already cheaper than the fixed one ?

Change the bank, unlikely… sell the house, very unlikely, but only God knows.

Guys,

I am back… with same old problem hahaha.. four months have passed now, and I am enjoying a lot the house, slightly further than where I lived before, but transports are great, so not really a big deal.

My experience is very difficult to maintain motivation with offset account, especially when Christmas is coming. I previously forecasted $4,500 extra repayment made on the top of interest, if I use normal P+I loan. But with the I only + Offset A/C, I only manage to save $2,300 which is only 50% of the target.

The current 2 year fixed rate is 6.14% (Homeside) is tempting me again. Currently I am paying SVR 6.80%. My observation from last interest rate cut where it was a very difficult decision made by RBA and NAB only passed 0.2%, it takes 3 x 0.25% interest rate cut to be equal with the 6.14% offered on 2 year-fixed rate.

And the game changer is that I have agreed with my wife to pay off the principal everytime we accumulated $20,000 in offset A/C, that means offset A/C will not be useful at all. We think that we prefer to take benefit $230 interest expense straightaway and hit the loan hardly. I am anticipating to receive $40,000 lump-sum mid next year.

I know that IO + Offset A/C is good for discipline people with investment oriented mind. But it seems that is not the case with me and my wife. My wife is quite reluctant to invest in property, I mean we want to have 2-3 investment properties, but not 10-15. We also prefer to buy a business if we have extra money in the future.

So, back to my question, with my expectation, goal and past experience ( at least 4 months), is 2-year fixed rate 6.14%, RIGHT FOR ME?

Additional information: I’m on 80% LVR and $420,000 total mortgage

Thanks

Ferdinand

I am sorry Richard to sound taking advantage from all of you guys. But is that not the purpose of this forum to share knowledge and to provide view and opinion? I might not be Michael’s client at the moment, but in the future, who knows? Be honest I am quite disappointed with my current broker, and he only gives one advice which everyone gives here, IO + Offset A/C without offering any alternative. I understand that it might be the best option for you guys, investment-minded people, but not everyone is same.

I received exactly same question from my best friend in Brisbane, and he is also confused about this IO+Offset A/C, because it is rather an unconventional idea not to repay the principal.

Well, I can’t thank enough to you, Michael for always being available to offer advices here and his generosity or Terry with his straightforward advice during the process of getting my property from the beginning, even until now. But if it is sounding like taking an advantage, then I politely request not to answer my questions.

I am an Accountant in financial services industry but I am still on the way to get my full qualification done and my knowledge sharpened, and I would be happy to share my knowledge in my area of expertise either in taxation and or financial services in the future when I am confident enough with my knowledge for free in this kind of forum.