Is it possible to negotiate fixed rate with CBA (8%, still 2 years to go)?

[helen_l99]

Hi,

Just wondering if anyone has experience with this. I have a fixed loan with CBA which is at ~8% rate for another 2 years. It was fixed a few years ago when the rate was high. Is it possible to negotiate discount on the fixed loan ? I heard from the other thread that some other people get more discount on fixed loan (in addition to variable loan). I have a large borrow with the bank (>1M).

Thanks

 

[tobe]

anythings possible, have you asked them?

Speaking with a crystal ball, you might find the answer is no, they kinda got you on the hook with a fixed rate, they get the same profit margin from you whether you stay the term or refinance, so there isnt anything in it for them to give you a discount.

 

[Rolf Latham]

Hi Helen

Our experience is usually no.

But there are sometimes some things where the lender will absorb some costs to refinance etc

ta
rolf

 

[helen_l99]

Thanks.

I think I read from the other thread: Sash wrote: ``CBA: it appears they were in the process of giving over 1% for one of my loan which is on a fixed rate.'' ... maybe he doesn't mean fixed interest rate... or maybe I missunderstand he somehow.

Also, does any one (becides Sash) gets more than 1% discount with CBA? Do they match NAB ?

Thanks

 

[sash]

Helen...I am a bloke!

A quick question....how much of $1m does the 8% loan represent??

1% off CBA is 6.81%.....1% off NAB is 6.67%....a 14 BP difference.....

Thanks.

I think I read from the other thread: Sash wrote: ``CBA: it appears they were in the process of giving over 1% for one of my loan which is on a fixed rate.'' ... maybe she doesn't mean fixed interest rate... or maybe I missunderstand her somehow.

Also, does any one (becides Sash) gets more than 1% discount with CBA? Do they match NAB ?

Thanks

 

[helen_l99]

Sorry Sash, that is now corrected I thought that I saw ``she'' in the other thread and changed mine. I throught that other people knew more than I did.

Helen...I am a bloke!


Just a small portion of mine ~250K.


A quick question....how much of $1m does the 8% loan represent??

1% off CBA is 6.81%.....1% off NAB is 6.67%....a 14 BP difference.....

 

[jonmardell]

the hard and fast answer is going to be a no from cba on this one. you have a contract with them to see out the term of the fixed rate period and they will not budge.

 

[Mick C]

Sorry to say, they wont budge for Fix rate.
Even if the another banks absorb the cost- they most likely only absorb $1200 MAX...and to break your fix rate of 8% is huge!

Sash's Rate are variable im pretty sure, not fixed.

Regards
Michael

 

[sash]

Yep....but if the other loans are not crossed and they know that the Helen has less than 80 LVR on each property.

I would find out the payout for the 8% loan....if it is less than 3k and the LVR is low then finance this amount and move it lock stock and barrell to someone like the NAB...who will give you 6.67%.

Assuming you have 250k at 8% and 1.25m at 7.0% I/O it is costing you 107.5k per annum in interest.

If you have sufficient LVR in each property and can refinance all the loans to NAB at 6.67% ...the first year interest is 100k. Assuming you have 4 properties...and the NAB also gives you 4k to change over. So you have 11.5k in savings to play with. Food for thought.....particularly given a loan portfolio of that size.

the hard and fast answer is going to be a no from cba on this one. you have a contract with them to see out the term of the fixed rate period and they will not budge.

 

[helen_l99]

Thanks everyone. Thanks Sash ...

I think the payout is quite high (a lot more than 3K) ... I have no ideas how they calculate this.... must be on the 6% rate or lower, so it works out to be a lot more than 5K.

Also, everyone is right, they don't budge on that. The reason is that they borrow from somewhere high too at that time, so they won't make a great deal of profit when the interest goes down.

Many thanks again

 

[Wunderbar]

They won't let you go! They've won.

 

[tobe]

note, the break costs for a fixed loan may be claimable for tax (if the purpose of the loan is to produce assessable income etc).

Like LMI, the capital cost is written off over a couple of years. If you also borrow the capital 'break costs' the interest on this ongoing is also tax deductable.

It will set back your wealth accumulation, but ease your cashflow and get you in a serviceability position to borrow again faster.

Speak to your accountnant, Im just a fool on the interweb.