Hi All
We have an IP that we are considering selling, but unfortunately the loan with NAB is currently on a 2yr fixed rate until April 2014. The fixed IR is 6.29% and we are on the Choices package. The loan is over $500k and the current variable interest rate on a Choices package appears to be lower at 6.08% (not sure what the SVR is without the Choices package discount?).
What happens in regards to exit/penalty fees if we sell? I always thought that if you break a fixed rate to sell the IP (or refinance), the bank hits you with high exit fees to recover the difference between the fixed rate and the (usually) higher variable rate. In this case it would appear that our fixed rate is higher than the comparable variable rate applicable under our Choices package. Wouldn't this mean that there would be no or minimal exit fees as the bank hasn't actually suffered a loss?
Any feedback would be great. Thanks.
Angela
We have an IP that we are considering selling, but unfortunately the loan with NAB is currently on a 2yr fixed rate until April 2014. The fixed IR is 6.29% and we are on the Choices package. The loan is over $500k and the current variable interest rate on a Choices package appears to be lower at 6.08% (not sure what the SVR is without the Choices package discount?).
What happens in regards to exit/penalty fees if we sell? I always thought that if you break a fixed rate to sell the IP (or refinance), the bank hits you with high exit fees to recover the difference between the fixed rate and the (usually) higher variable rate. In this case it would appear that our fixed rate is higher than the comparable variable rate applicable under our Choices package. Wouldn't this mean that there would be no or minimal exit fees as the bank hasn't actually suffered a loss?
Any feedback would be great. Thanks.
Angela