Is this possible?

[WASP]

Brains Trust

Is this possible?

You have some variable rate loans with Bank A and notice that there are cheaper fixed rate loans around with Bank B

Rather than incurr break fee's you take a loan with Bank B and pay out Bank A apart from say $1,000.00

You now are paying less and not incurring the break fee's

 

[josko]

I'm not sure I understand.

A Break Fee is a Break Fee. How would you get out of paying it by switching banks?

regards jo

 

[WASP]

I'm not sure I understand.

A Break Fee is a Break Fee. How would you get out of paying it by switching banks?

regards jo

by not paying out the loan in total


sorry not up to speed with all this stuff

 

[alexlee]

Probably not. Bank B would want to register the mortgage against your property, and see that Bank A has also registered a mortgage against the property.

Cat's out of the bag at that point.
Alex

 

[josko]

sorry, get it now!

Prob not, you'd have to have a second Mortgage of the property as Alex says.

regards Jo

 

[Medine]

Hi WASP,

You could do it if you had heaps of equity and bank B was willing to take second mortgage. You'd need heaps of equity because bank B would consider Bank A's mortgage as the limit of the loan, not the balance. Then they'd want enough equity to secure their own loan.

If the loans are big enough you'd also start causing yourself serviceablity issues, because you'd have to show you can afford both loans.

Cheers, Medine

 

[Finance guru]

Hi Wasp,

If you check your loan specs, you'll probably find that there is only a limited amount (prob around $10K) that you can pay against your fixed rate loans at Bank A before incurring a break cost. So you'd most likely get charged that fee regardless.

 

[stumunro]

I do something similar with a draw down and loc accounts with different banks.

Because i've exhausted a commbank LOC. and was starting to take from an ANZ drawn down loan, i moved all the available funds from the ANZ into the commbank LOC. Which only incurrs a once off $50 redraw fee, and allows me to have the flexibility of the LOC.