Interest rate change

[NBS]

Having been away I returned to find my IP had rolled over and reverted to the default interest rate (BUGGER) new it was getting close. The rate increase by .68% taking the interest rate to 5.77. So opted to contact the bank and said in this current climate that seems rather rich. They agreed and say they have a special on and we can reduce that by .95% to 4.82% for 5 years . It will cost $95.00 down form $490 odd to effect. A saving of about $170 a month

I ask if this will change anything in regard to the existing loan arrangements, NO just the interest rate. So I say go ahead.

So figure I'll ask my bank on my PPOR and put it to them and to my amazement they reduced and meet the same interest rate a $260 ish a mth saving.

I'm working on my insurance (home and content) I have been placed in a flood zone to which is totally false my current insurance person I spoke to basically said everyone has to pay something for flood ???

Anyway another call and the other insurance company says I'm in a flood zone and I ask for the map and state my disagreement. They say they will get it reviewed will find out early next week.

The closest water which has come to me is 100m away and to get into my place will have to raise another 1.8 m.

Anyway does not hurt to make a call as I have found out can save you some $$$.

 

[property_girl]

It's good for people to know this. Bank clients have more power in bargaining than they think. I always bargain with my bank, and most of the time they are happy to come to the party.

 

[Peter_Tersteeg]

They agreed and say they have a special on and we can reduce that by .95% to 4.82% for 5 years

Why only 5 years? How did the rate get so high in the first place?

Sounds to me like you're with a fully securetised lender that has a tendency to advertise a low cheap rate, but it creeps up over time. They then charge you fees to get it lower again.

I'm willing to bet that you'd be better off overall if you were with a more mainstream lender that's consistently competitive. You may not get the absolute cheapest rate, but the cost of the loan would likely be lower overall.

 

[NBS]

Hi Peter,

I should have clarified the 5 years was for the investment property only. My PPOR is for the term of the loan.

I was not that concerned about the 5 years for the investment property as I will be putting it on the market well within the 5 year period.

My PPOR will also be going on the market within the next couple of years. I felt the reduced interest will provide me some $$ in my pocket even in that short time.

 

[danwatto]

Is that 5 years fixed rate?
Could be costly to sell it during that period if it is..

I ask because usually variable does not have a time period, although could have a time period for "interest only"