Hi all,
I'm about to purchase my first property and am wondering if i can do the following:
Borrowing 500k
Fix my loan for 90% of the loan at IO, with variable for 10% (50k) P & I
If i have money in my offset, say 10,000.. will that 10k offset the 10% variable at full 100% offset, or will it only give me 1.5% partial offset for 90% of my 10k, and only 10% of the offset being used towards the P & I portion? just wondering, thanks!
Depends on which loan the offset is linked to.
I'd link it to the variable – there's not many lenders that allow for a full offset against a fixed loan.
Make sure that $50k is enough – if you think you can save more than this during the fixed period than I'd look to increase the variable portion.
Is this property an IP or PPOR?
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]
PPOR, commbank will only partial offset the fixed at 1.5%, so i wasnt sure if i could say what loan the offset will be linked to. I was planning on fixing 90% at 5.29% IO, and having the variable rate at 5.8% with the wealth package and the offset linked to that.. Then revisit it after 2 year, i should have close to the 50k in variable payed off..
Alternative would be to look at a lender that offers 100% offset on a full fixed rate.
That way you would probably get the best of both worlds.
Not sure why for one property you would want to go with a CBA Wealth Package makes the comparison rate a lot higher than the quoted rate.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
There is a several lenders that offer full offset on fixed loans but you pay a premium on the rate. Why are wanting to fix your loan?
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
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You don't necessarily have to pay a premium – Adelaide's one year fixed start at 5.29% with a full offset.
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]
Highly unlikely in most common instances will mean that you financial benefit from a one year fixed with a linked offset unless you have a a massive amount of money sitting in your offset. The more likely case in the above scenario is the monies in the offset will be accumulated over a longer period of time say 2-3 years which is why their fixed rates for 2 and 3 years is a whopping 5.64% and 5.69% respectively. Again the question is why are you fixing now? Is a risk base decision or are you merely wanting to 'beat the banks'?
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Depending on the circumstances, I don't see a problem with fixing some or all of a loan at present – particularly if the loan is securing a set and forget type IP that the owner doesn't intend on selling or releasing equity from (which isn't necessarily an issue with fixed loans) during the fixed period.
I've personally locked in a couple of fixed rates against a couple of IPs recently.
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]
I was looking to lock in 5.29 on IO as thats a a good rate IMO, the reason i was looking to do a 2 year rate, is because after the fixed rate finishes, it reverts to the standard variable rate anyway? and if i have the remaining 10% in variable, i can offset against that and knock over some principle in the mean time..
For the wealth package to cost 375 pa, you still save more then that in interest alone with the lower rate.. i would like the offset as ill have around 40-50k to have in it so it makes sense to me to have it..
I have a question, after split, do you technically have 2 separate loans, and have to maintain them separately e.g. fees, payments, etc.
Yes, separate loan splits mean separate loan facilities – so separate repayments.
You're not necessarily charged separate fees though. Most pro packages have an annual fee that covers a certain number of loan facilities. Other lenders like Homeside have a $10 p.m fee which is applicable to each loan split.
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]
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