3 and 5 year fixed rate thread
- Thread starter lizzie
- Start date
Not even for one year?
5.09% for 1 year appears reasonable at the outset, but as I mentioned it's hard to work out if it's worth doing unless I have some idea of the break cost ...
but u can get early 5s with an online lender on variable and mid 5s with a full service lender without the break risk...............
a 40 pt spread isnt worth the "unknown"in my view.
While in theory, the break costs shouldnt be large, the fact that your lender wont put a ceiling on that, clearly that says tread with great care.
ta
rolf
the break fee will be the difference in the fixed rates at the time you break it (not exactly but this will be give you a good indication) So basically if you are on a 2 year fixed of 4.99% and after 1 year you break the contract and at the time the banks fixed rate/cost of funds is 5.49% you will have to pay the difference. If you are considering selling or needing to make changes in that time then as rolf said do not do it.
This is my rough estimate remembering they all have a different formula. You can get the formula btw but the cost of funds is the unknown in the future.
- If breaking a 4.99% 2 year rate (estimate of costs of funds at origination say 2.99% ie 2% spread).
- Then breaking with a year to go with fixed rates then at 5.50% (let's assume cost of funds is then also 3.50% ie same spread).
- break cost would be 4.99 - 3.50 = 1.49% x amount owing
So fixed rates would have to go up 2% for no break costs to be payable
- If breaking a 4.99% 2 year rate (estimate of costs of funds at origination say 2.99% ie 2% spread).
- Then breaking with a year to go with fixed rates then at 5.50% (let's assume cost of funds is then also 3.50% ie same spread).
- break cost would be 4.99 - 3.50 = 1.49% x amount owing
So fixed rates would have to go up 2% for no break costs to be payable
Not even for one year?
5.09% for 1 year appears reasonable at the outset, but as I mentioned it's hard to work out if it's worth doing unless I have some idea of the break cost ...
Hi,
See page 2 of attached file to get an idea as to how break costs are calculated. It changes daily, but atleast you would know what to expect if you decide to break the fixed term contract midway
Regards,
TV
I checked nab website today and noticed that the 2-year IO in advance fixed home loan rate is now 4.79% with Choice package. I'm pretty sure it was 4.89% last week.
http://www.nab.com.au/wps/wcm/connect/nab/nab/home/personal_finance/6/1?urid=1365379538723
http://www.nab.com.au/wps/wcm/connect/nab/nab/home/personal_finance/6/1?urid=1365379538723
That's for interest in advance.
Yeah CBA's is 4.84% for interest in advance, seems like that is the push at the moment...
yup, every year leading up to tax time
You can request anything you like. Most lenders would consider such a request however they might delve quite deeply into the proposed purchase and seek to control the funds for it.
Apparently not. I spoke to them at 131312 and they have made no effort in keeping me. Firstly I was told there is a new policy since 2012 that new IO loans will need formal sign-off by a financial adviser. Secondly they will not match competitor's 4.99% 2-year rate on IO loan.
When asked, he said there is no costs involved in paying off my current variable loan. It will just be the accrued interest plus outstanding balance and a small discharge fee.
hahahha fin advisor
jokers !
Send them the mortgage discharge, dont tal about it
DO !
PM me and we will set it up for u
I bet you get a call within 48 hrs
ta
rolf
I had nab try that with me as their phone staff couldnt deal with me because we were a pty ltd so I had to talk to a business banker. I just said oh please, sent an email to someone and it got fixed.
IMO many lenders are great at getting you in the door but post settlement service is another story. For a lender to take a month to convert a loan on an interest only conversion or a facility restructure...
IMO many lenders are great at getting you in the door but post settlement service is another story. For a lender to take a month to convert a loan on an interest only conversion or a facility restructure...
It appears that AMP is now offering an additional 0.15% off their advertised fixed rates, to members of certain professional bodies (eg. accounting bodies) or affiliates. So the 1-year and 2-year fixed rates, for example, is both 4.84% after this discount, and 3-year rate is 5.04% to these members.
