I feel giddy with relief...
Superb news Tracey. Just got in from a short travel stint and read the great news.
SANF++ (For those software guys / gals reading)
Offer of finance withdrawn - sign of further credit tightening?
- Thread starter Perp
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Superb news Tracey. Just got in from a short travel stint and read the great news.
SANF++ (For those software guys / gals reading)
Good on ya mate
virtual beers consumedI wonder if the fools in the D&G camp that were cheering your troubles will take back their childish comment?
Dave
Excellent news Tracey.
Great learnings & take-aways for us as well.
Great learnings & take-aways for us as well.
Good on ya mate
I wonder if the fools in the D&G camp that were cheering your troubles will take back their childish comment?
Dave
Nah, my turn again now!
A further question... as there are a few brokers watching this thread, I'll post it here.
Regarding fixed vs variable interest rates: my understanding is that it's usually entirely at the discretion of the borrower, taking into account the various rates on offer, whether they want to go fixed or variable. But I'm almost afraid to ask for a fixed interest rate because I'm concerned they'll say that we're making a counter-offer and thus their previous offer is yet again rescinded. But I assume they wouldn't try that on! Am I right that if you're offered a variable P&I loan, but you're happy with the fixed rates on offer, that you can simply elect to take that offer of a fixed rate for a certain period?
Second question: can you explain this? BOQ's mortgage loan rates are higher for variable than for fixed, indicating that they expect interest rates to go down. Yet for business loans (other security), the reverse is true, by quite a substantial amount! Variable rate is 9.40%, fixed for 1 year is 6.55%. Have I read this interest rate table correctly, and is anybody able to explain this discrepancy? At this stage, I'm thinking I'll go the fixed!
Regarding fixed vs variable interest rates: my understanding is that it's usually entirely at the discretion of the borrower, taking into account the various rates on offer, whether they want to go fixed or variable. But I'm almost afraid to ask for a fixed interest rate because I'm concerned they'll say that we're making a counter-offer and thus their previous offer is yet again rescinded.
But I assume they wouldn't try that on! Am I right that if you're offered a variable P&I loan, but you're happy with the fixed rates on offer, that you can simply elect to take that offer of a fixed rate for a certain period?Second question: can you explain this? BOQ's mortgage loan rates are higher for variable than for fixed, indicating that they expect interest rates to go down. Yet for business loans (other security), the reverse is true, by quite a substantial amount! Variable rate is 9.40%, fixed for 1 year is 6.55%. Have I read this interest rate table correctly, and is anybody able to explain this discrepancy? At this stage, I'm thinking I'll go the fixed!
To save you more heartache, why don't you just settle on a variable rate and switch to fixed once its settled. That way there's no chance of further problems.
In regards to fixed and variable rates, its not BOQ thinking rates will come down. BOQ (like all other banks) buy wholesale money. Its the money market that determines fixed rates. Some people might be selling some cheap 2 or 3 year money (maybe they have different motivations other than rates for doing so - e.g. could be governments, super funds, etc). BOQ will then go and buy that money and re-lend it at a margin. BOQ are price takers, not price makers. This is the same reason for the difference with commercial lending... at the moment, you would choose fixed 99% of the time because the variable rate is too high. It's not normally like that.
In regards to fixed and variable rates, its not BOQ thinking rates will come down. BOQ (like all other banks) buy wholesale money. Its the money market that determines fixed rates. Some people might be selling some cheap 2 or 3 year money (maybe they have different motivations other than rates for doing so - e.g. could be governments, super funds, etc). BOQ will then go and buy that money and re-lend it at a margin. BOQ are price takers, not price makers. This is the same reason for the difference with commercial lending... at the moment, you would choose fixed 99% of the time because the variable rate is too high. It's not normally like that.
Yes, bloody good idea! I confess I've never had a fixed rate product before
Is it pretty straightforward, ie you go into the branch or ring your private banker and say you want to fix, or do you have to "apply" and fill out reams of paperwork?Hi Tracey. Whenever we have fixed it has been to prepay the interest for a whole year and THAT definitely involves reams of paperwork and more signatures than you could poke a stick at.
To simply fix may be different, but I have never done that. Are you wanting to fix so that you can bring your interest expense into this financial year? If so, get your biro ready.
To simply fix may be different, but I have never done that. Are you wanting to fix so that you can bring your interest expense into this financial year? If so, get your biro ready
.
Great postscript!
). So despite the base interest rate being about 2% less, which would drop the interest payments by $20K pa, the principal component meant that our overall payments actually raised by $20K pa.
We really felt that we had to refinance, though, to release additional funds to pay land tax etc, so we decided to run with the finance as offered and see if we could change to I/O later.
This week I built up my courage and sent a carefully worded and polite letter asking if we could change to I/O - anticipating trouble given that it had jeopardised the whole refinance when I asked the same thing 6 months ago.
I'm delighted to report that the response was "sure, no worries, just sign this form - too easy!".
I'm very pleased with this outcome, though surprised, and even more intrigued as to what prompted all the drama in January.
But whatever - I'm stoked!
This query - to change P&I to I/O - was the thing that started this whole debacle, with BOQ wanting to retract their approval. The challenge for us is that we had an approx $1M loan previously on I/O, which they changed to P&I, and amortised over only 15 years! That adds $40K pa to the payments (which is not yet insignificant for us
). So despite the base interest rate being about 2% less, which would drop the interest payments by $20K pa, the principal component meant that our overall payments actually raised by $20K pa. We really felt that we had to refinance, though, to release additional funds to pay land tax etc, so we decided to run with the finance as offered and see if we could change to I/O later.
This week I built up my courage and sent a carefully worded and polite letter asking if we could change to I/O - anticipating trouble given that it had jeopardised the whole refinance when I asked the same thing 6 months ago.
I'm delighted to report that the response was "sure, no worries, just sign this form - too easy!".
I'm very pleased with this outcome, though surprised, and even more intrigued as to what prompted all the drama in January.
But whatever - I'm stoked!
