2 year fixed loans how lond does it take for a bank to switch?

[brisbane 04]

Hi All,
I'm looking at changing to a 2 year fixed interest only loan with my bank from a variable loan on 2 investment loans. I asked for this to happen just on one month ago. I've just been informed by my bank that the 2 year fixed loan is expected to rise soon and too lock in my rate of 5.09% I will have to pay for the 2 loans approx $890. To those gurus out there that locked in before how long should it take from me advising them to lock it in and the bank locking in the rate?
Thanks Martin

 

[D_One]

Mine took just a phone call and 30mins later, done.

 

[sonnic]

Hi,

I locked in two with CBA over the phone. I was logged on to my internet banking at the time and saw the change in interest rate straight away!

Sonnic

 

[jonmardell]

Hi All,
I'm looking at changing to a 2 year fixed interest only loan with my bank from a variable loan on 2 investment loans. I asked for this to happen just on one month ago. I've just been informed by my bank that the 2 year fixed loan is expected to rise soon and too lock in my rate of 5.09% I will have to pay for the 2 loans approx $890. To those gurus out there that locked in before how long should it take from me advising them to lock it in and the bank locking in the rate?
Thanks Martin

It depends on your bank, who are you with? CBA and St George can be done same day where others like homeside and ANZ can take more than a week.

 

[wylie]

... Or Westpac could completely ignore your request.

One year we sent a request to have five loans fixed and prepaid. They did two and completely ignored the other three.

I'd be chasing your bank up in case you've slipped off their radar completely.

 

[brisbane 04]

I'm with NAB and just received an email on Friday asking if I wanted to lock the rate in and that it would cost me $900. I replied that I requested this change over a month ago and that I wasn't prepared to pay this.

 

[jonmardell]

I'm with NAB and just received an email on Friday asking if I wanted to lock the rate in and that it would cost me $900. I replied that I requested this change over a month ago and that I wasn't prepared to pay this.

that is poor service if it has taken that long.

 

[Rolf Latham]

I'm with NAB and just received an email on Friday asking if I wanted to lock the rate in and that it would cost me $900. I replied that I requested this change over a month ago and that I wasn't prepared to pay this.

if the chanhe was requested in some form or writing, or recorded call you could push a little harder on the non payment of the rate lock

ta
rolf

 

[Bhp19]

Both CBA and Westpac were bothe offering 4.99% 2 yr fixed about a month ago, fixed 3 of mine then and it took a couple of days using my broker to do it.

 

[brisbane 04]

Thanks for your advice. Rolf my bank manager acknowledged my request by email and at the same time requested my last 2 payslips. I've been doing business with her for a fairly long time my pay goes straight into NAB. It's frustrating she keeps stuffing up but makes amends financially when she does but I'm just sick of the dramas each time an error happens. I think I'm going to have to move banks

 

[Angel13]

I'm thinking about fixing mine for 2 years at 4.99 with CBA. I've already got the paperwork, just have to sign it and fax it back.

However, I saw my accountant and he mention that maybe hold off as some economists are predicting rates to drop two more times by September.

I just wanted your opinions on this as I'm feeling really torn now.

Also is there an easy way to work out what break fees I would pay if I locked in for two years but sold my property in 12 -14 months? They sent through a really complicated formula and I have absolutely no idea how to work it out. I guess I just want to know if I would be looking at a $5K breakout fee or a $20K breakout fee on a $500K mortgage. Any advice would be appreciated.

 

[Rolf Latham]

I'm thinking about fixing mine for 2 years at 4.99 with CBA. I've already got the paperwork, just have to sign it and fax it back.

However, I saw my accountant and he mention that maybe hold off as some economists are predicting rates to drop two more times by September.

I just wanted your opinions on this as I'm feeling really torn now.

Also is there an easy way to work out what break fees I would pay if I locked in for two years but sold my property in 12 -14 months? They sent through a really complicated formula and I have absolutely no idea how to work it out. I guess I just want to know if I would be looking at a $5K breakout fee or a $20K breakout fee on a $500K mortgage. Any advice would be appreciated.

clearly ?? , dont fix

the fee may be 5 k or it may be 20.

Much depends on where rates may be when you sell

ta

rolf'

 

[Aaron_C]

If you're looking to sell at all within 12-24 months then don't fix for goodness sakes!

 

[Angel13]

clearly ?? , dont fix

the fee may be 5 k or it may be 20.

Much depends on where rates may be when you sell

ta

rolf'

Hi Rolf,

What if it was the following scenario:

I fix now for 2 years at 4.99% had to sell in 14 months but the interest rates were 6% by then?

 

[Rolf Latham]

Hi Rolf,

What if it was the following scenario:

I fix now for 2 years at 4.99% had to sell in 14 months but the interest rates were 6% by then?

variable rates are now mid 5s.

best to ask your lender that q, but you know what answer you will get

its not possible to tie it down

My suggestion is dont fix if you need to ask that question, fix some other loans

t
arolf

 

[Brady]

As mentioned, shouldn't fix for 2 years if your thinking of selling in 14moths, breaking the fix would cost you more then the saving on the interest rate.

Maybe look at 1 year if you want to fix.

The rate should not be the sole reason for fixing, the loan still needs to have features that match your needs.

 

[Peter_Tersteeg]

However, I saw my accountant and he mention that maybe hold off as some economists are predicting rates to drop two more times by September.

Selling your property aside, the math on fixing tends to work even if there are further rate drops.

If rates drop twice over the next 12 months and you're on about 5.5%, then between now and when they drop to 5.00% you're financially ahead. From that point on you're at a break even point assuming they don't drop further.

The math actually works that for you to be financially worse off, rates would need to drop a total of 1% over the next 2 years, with a drop less than every 5 months over that period of 0.25% which the banks would have to pass on in full.

I could be wrong, but personally I don't think that rates will drop that far. Our employment & business figures aren't that bad, several sectors of our economy are actually extremely strong. Bond markets (which is what prices fixed rates) are up recently.

There's always a risk in fixing, but right now it's very hard to resist.

 

[Angel13]

As mentioned, shouldn't fix for 2 years if your thinking of selling in 14moths, breaking the fix would cost you more then the saving on the interest rate.

Maybe look at 1 year if you want to fix.

The rate should not be the sole reason for fixing, the loan still needs to have features that match your needs.

Yeah I don't have plans to sell but the reason I want to fix the loan is because I am pregnant with my first baby. I go on leave from July and I will be on half pay for 18 months. Money will be tight but still just manageable. I also have a little bit of savings. Having the loan fixed for 2 years at 4.99% would give me a peace of mind.

It's unlikely that we will have to sell but my partner is self employed so you know how it is, anything could happen. I always like to work out a worse case scenario before I go into things.

 

[Brady]

Yeah I don't have plans to sell but the reason I want to fix the loan is because I am pregnant with my first baby. I go on leave from July and I will be on half pay for 18 months. Money will be tight but still just manageable. I also have a little bit of savings. Having the loan fixed for 2 years at 4.99% would give me a peace of mind.

It's unlikely that we will have to sell but my partner is self employed so you know how it is, anything could happen. I always like to work out a worse case scenario before I go into things.

Again if its a possibility I wouldn't personally be fixing if I thought I might sell during the fixed period.

A split could be a possible option that gives you security of a fixed rate, but also allows you the flexibility of the variable, along with a small ERA if you decided to sell whilst fixed

Also would be very worth while speaking to a professional (Financial Planner) around Risk Insurance (income protection), going down to one income, increased expenses (the baby) and husband self employed.
Although sometime can be little pricey to some paying income protection of $200 a month works out to be $24k, my bet if you had to sell you house quickly being desperate for funds you would probably sell cheaper...
Best of luck, but speak to a professional.