After a bit of help
Currently getting a loan for 2nd IP
Getting a LOC secured against IP 1 for deposit costs
And a second loan secured against IP2 for remaining 80% purchase
Last night the banker offered me a couple of deals including a 2 year fixed rate of 4.89 % . 3 years is 5.09 and 5 is 5.41
I know there are better deals out there but I'm sick of time wasting so will be taking one of these
I indicated to the banker that I really wanted to go for a 5 year fixed rate loan as I feel that in 2 years the rates will be higher as they are already at historic lows
However he tried to say this was not a good idea as there would be fees imposed if I were to sell IP 1 before 5 years is up
This has me confused as I thought it would not make a difference as IP1 is security for the LOC which i thought is always a variable rate?
Is this correct or am i wrong
I guess what I am asking is what are the disadvantages of fixing for a long period of time and what is the process for selling an IP that is used as security for a loan
Thanks
Currently getting a loan for 2nd IP
Getting a LOC secured against IP 1 for deposit costs
And a second loan secured against IP2 for remaining 80% purchase
Last night the banker offered me a couple of deals including a 2 year fixed rate of 4.89 % . 3 years is 5.09 and 5 is 5.41
I know there are better deals out there but I'm sick of time wasting so will be taking one of these
I indicated to the banker that I really wanted to go for a 5 year fixed rate loan as I feel that in 2 years the rates will be higher as they are already at historic lows
However he tried to say this was not a good idea as there would be fees imposed if I were to sell IP 1 before 5 years is up
This has me confused as I thought it would not make a difference as IP1 is security for the LOC which i thought is always a variable rate?
Is this correct or am i wrong
I guess what I am asking is what are the disadvantages of fixing for a long period of time and what is the process for selling an IP that is used as security for a loan
Thanks