flexiplus mortgage

[dook]

Hello everyone,
After reading all the posts and some books im pretty sure a good way to structure a loan would be to have a fixed interest i.o.loan for at least three years, then either fix it for a further term or refinance it to a p.i. loan .
So ive just come back from the bank (N.A.B.) and their pushing this Flexiplus mortgage 6.71% at me with a variable rate (recomended by my financial planner)
Am i getting funny feelings for no reason or would this product actually be what im after?
The whole thing about not being able to fix the interest is throwing me, there is other loans on offer of course but this one is recomended.
Does anyone know this product? Wouldnt it be better in these low interest times to fix a rate .


Any feedback would be largely appreciated .

"Dook"

 

[Lotana]

Hi Dook.

I don't know this particular product, but you might be confusing two different things: interest only feature (IO) and fixed interest (FI). IO can apply to any loan - variable or FI. IO is set for a number of years (typically 3), and then the loan reverts to principal and interest (P&I). In most cases you should be able to get another IO period of years, bur eventually the bank wants its money back. Most IO products allow you to make extra payments free of charge, so the only difference with P&I is that your obligation is to pay the interest, paying off the principal is your right.

FI can be applied to IO or P&I loans. It also has a fixed period. The rate is guaranteed to stay unchanged within this period. I personally don't like FI loans - they are inflexible, tend to have high discharge fees, and the interest rate historically is worse than the variable rate.

Just adding my 2c to the forum's bank of opinions.

Say cheese

Lotana

 

[bundy1964]

Hi dook

It is a line of credit ( LOC ) for residential only either owner occ or investment.

http://www.national.com.au/Personal_Finance/0,,12156,00.html

If your interested in shares if you hold 500 NAB shares you can do the flexiplus loan fee free for the first 5 years. There are also other benifits of owning there shares.......if you intend doing a lot of loans with them it may be 30 odd k well spent.

Rolf would be the person to say if the rate is competative or not.

If I did residential I would look at LOC and use that as a parking spot for future deposits on IP's and to fund other investments.

bundy

 

[geoffw]

If your interested in shares if you hold 500 NAB shares you can do the flexiplus loan fee free for the first 5 years.

Bundy and Dook,

If you have a Professionals Choice package (that's the NAB equivalent, the other big banks have similar products), you pay a fee of about $300 pa, and in return get fee free, and, in some cases, a lower interest rate.

The "fee free" for me has meant no loan application or valuation fees for new IPS- so well worth the money.

A friend has done a similar package at another bank (I'm not sure Which Bank), and will save about $400 pa in fees- to say nothing of the $500pm he's saving by changing car loans and credit card laons to LOC. (I have warned him strongly though against using credit cards badly again).

 

[ocean view]

WHICH LOAN?

DOOK

you need to way up & decide what is best!
The banks offer so many loans today it is hard to judge.
I take out a loan every month & the best at the moment to me is the MAV package offered by CBA/COLONIAL. IT IS MAINLY ONLY OFFERED THROUGH mortgage brokers. It has a 1 yr fixed rate 5.29% then a pro rate of 5.97% there after depending on the loan size. If you want to fix you can have up to .2% off the carded fixed rates also.IT IS PRETTY HOT !
But the best loan always changes from bank to bank!!! You just have to search for it!
If you would like more info you can email me!

cheers bribie

 

[h8dk97]

Re: WHICH LOAN?

Originally posted by bribie
DOOK

you need to way up & decide what is best!
The banks offer so many loans today it is hard to judge.
I take out a loan every month & the best at the moment to me is the MAV package offered by CBA/COLONIAL. IT IS MAINLY ONLY OFFERED THROUGH mortgage brokers. It has a 1 yr fixed rate 5.29% then a pro rate of 5.97% there after depending on the loan size. If you want to fix you can have up to .2% off the carded fixed rates also.IT IS PRETTY HOT !
But the best loan always changes from bank to bank!!! You just have to search for it!
If you would like more info you can email me!

cheers bribie

Hi bribie,

Could you tell us a bit more about this .2% discount. I've been to CAB and what they offered me was .5% off variable and .15% off fixed, but that's just a part of their standard pro package.

 

[Aceyducey]

Dook,

Why don't you speak to a mortgage broker.

They can give you a range of options rather than just the NAB & a good one won't push you towards an unfavourable loan.

Rolf, on the forum, is a good broker to start with

Cheers,

Aceyducey

 

[dook]

thanks again

thanks to all the awnsers to my flexiplus mortgage post.

Yes aceyducey i think a broker is the way to go, i have developed this relationship with a financial planner who works for the N.A.B. nice fella but i think its best to have a bigger pool to choose from. ive already made an appointment with a guy here who has a good rep.

Lotana- im confusing a lot of things at the moment but with the help of you guys and some common sense i think im struggling through

bribie- ill ask q's about that particular loan thanks.

bundy 1964 no shares with them but good to know. thanks for the link.

geoffw- thanks , keep an eye on that friend of yours he needs you.