Refinance - Interstar (=Challenger)

[Sidor]

Hi everyone,
pleased to become a member of this valuable forum.

I am a newier and would appreciate to find some answers from experienced memebers.

I got Low-Doc mortgage with Interstar (Challenger) 2 years ago, 8.19% after last increase.

Now I got tax returns for the last 2 year and want to get better interest rate.

Broker who arranged first mortage for us suggested moving from Interstar to different lender #2, saying that Lender #2 can give better conditions (6.99% fixed for 1st year and 7.42% from 2nd year and so on - rates prior last increase) even that Interstar will charge us $3000 early exit fee.
Broker is saying that Interstar will not give much better rate ...


My question are:

1. Is my broker just ********ing me and just wants to get his comission from Lender #2 because it is more profitable for him ?

2. Is there anyway to switch from my current broker(=loan manager) to another one staying with Interstar and avoiding paying exit fee ?

Any replies would be very much apperiated

 

[wylie]

Hi and welcome.

Your question - Is there anyway to switch from my current broker(=loan manager) to another one staying with Interstar and avoiding paying exit fee ?

I would not think you need to change banks because your loan broker no longer uses a particular bank. How long are you locked in to this lender before you no longer are up to exit fees?

I would wait and one of the brokers on the forum should be able to answer all of this, but I know that for us, we recently paid about $700 to change into a different type of loan but in the first year the savings to us will be about $3000.

You would need to look closely at what you want to do, because a $3000 break fee is a lot to make up.

Wylie

 

[Sidor]

Hi and welcome.

I would not think you need to change banks because your loan broker no longer uses a particular bank. How long are you locked in to this lender before you no longer are up to exit fees?
Wylie

Thanks Wylie.

Early exit fee applied within the first 5 years, so we stuck for another 3 years with them unless we pay $3000 exit fee ...

My broker seems to be unwilling even to consider staying with tInterstar because I think he won't get comission for that and wants to move us to different lender ....

And I can't approach Interstar directly because they work only through brokers ...

Not happy with Interstar(=Challender)

 

[The Y-man]

Early exit fee applied within the first 5 years, so we stuck for another 3 years with them unless we pay $3000 exit fee ...

Sidor,

You need to weigh up the reasons for moving lenders. For example, over the next 3 years, will the difference in interest between the current and proposed add up to more than $3k? Furhter, are you looking ot refinance at this point in time?

Cheers,

The Y-man

 

[Sidor]

Sidor,

You need to weigh up the reasons for moving lenders. For example, over the next 3 years, will the difference in interest between the current and proposed add up to more than $3k? Furhter, are you looking ot refinance at this point in time? Cheers, The Y-man

Thanks for the advice ...

I will need $50k in about 6-8 months for family things, so I do not really need to refinance right now, but my broker saying that I need to do it right now and using equity in out property refinance as high as possible, saying that we will get these $3000 exit fee back in one year.

 

[yo yo ma]

I will need $50k in about 6-8 months for family things, so I do not really need to refinance right now, but my broker saying that I need to do it right now and using equity in out property refinance as high as possible, saying that we will get these $3000 exit fee back in one year.

Hi Sidor
Maybe you can ask your broker to show you how you would make those savings... Then you would feel more confident about making the switch, rather than just blindly trusting the word of your broker... Don't forget to include the new loan establishment fees. Another thing is that it is good to get these things in writing... All the best with it
Steve

 

[Spectre]

Hi Sidor

Whats the loan amount?

VERY ROUGHLY..

Say on 300k... difference in interest from what you're talking about is @1.2%
300k x 1.2% = 3600

So you save 3600 and pay 3000 and come out 600 ahead, then legals, stamp duty etc... probably a break even.

Then your ongoing rate is better so you're coming out ahead.

Dont know if you need to max everything out today though.

You could always just ring the lender and tell them you're looking at leaving too, what can they do for ya.

Please advise if I missed something

Regards
Richard

 

[alexlee]

Incidentally, has anyone heard any mortgage brokers say that they should avoid non-bank lenders because of the risk that their rates might rise faster than banks? Not just lo-doc and no-doc but full-doc as well?
Alex

 

[Sidor]

Hi Sidor
Whats the loan amount?
Richard

Richard, thanks for comments
$240K low doc at the moment.

With Interstar (Challenger) I even do not know where to ring - they only work through loan managers ...

Will try to call their Customer Support ...

 

[Spectre]

Interesting.
Have a look on your statement for the #

 

[Sidor]

Interesting.
Have a look on your statement for the #

This is only my broker's number on the statement

Anyone has loan with AMP ?

 

[Glucose]

Richard, thanks for comments
$240K low doc at the moment.

With Interstar (Challenger) I even do not know where to ring - they only work through loan managers ...

Will try to call their Customer Support ...

Challenger's phone no. is 03 86161600.