switching lenders

[investor2009]

H

When our current mortgage comes off it's fixed rate we'd like to dhop for the lowest deal. Are there generally any fees for doing this? The loan is pretty low LVR

We fixed for 3 years @6.5%.. And can't wait to see the end of it. Whats a low rate now, 5% fixed odd? And I hope it remains that way at least until later this year when it does come off
Thank you

 

[Rolf Latham]

4.49 to 4.69 fixed for 3 seems to be available if you chase around some of the smaller credit unions

As always, caution applies that ratei isnt everything for many people, though its the only bottom line for some

ta
rolf

 

[tobe]

H

When our current mortgage comes off it's fixed rate we'd like to dhop for the lowest deal. Are there generally any fees for doing this? The loan is pretty low LVR

We fixed for 3 years @6.5%.. And can't wait to see the end of it. Whats a low rate now, 5% fixed odd? And I hope it remains that way at least until later this year when it does come off
Thank you

Why is this time diferent? If you regretted fixing last time, why are you doing it again?

 

[Jamie M]

Before you lock into another fixed term - consider what you're longer term goals are and how this property plays a part.

You don't want to lock in at the "lowest" rate to find that the lenders policy aren't conducive to your goals but you're stuck with them due to the break costs.

Cheers

Jamie

 

[Aaron_C]

Fees for switching would be pretty minimal - particularly the savings from going from 6.5% to mid 4.xx. Although as the others said, fixing your rate may prove to be another mistake so tread lightly.

 

[HLE]

There really isn't any simple answer because nobody can predict the future of interest rates, not even the Reserve Bank of Australia (RBA).

Firstly, you should decide if it is suitable for you to fix your home loan based on the future plans for your finances and the property that is security for the loan.

When is fixing a bad idea?
A fixed rate home loan works in a very different way to a variable rate home loan. You will lose a lot of the flexibility and may face high exit fees if you make changes to your loan or make extra repayments during the fixed rate period.

Don't fix your loan if:

You need to make large extra repayments on your loan.
You may sell the property that is security for your mortgage.
You may refinance your home loan.
You plan to renovate or build a new home, often you may need to refinance.
You don't like being locked in with a particular lender or loan product.

How long should you fix for?
The longer you fix your loan, the higher the premium you will pay for the security of a fixed interest rate. Most people choose 3 year and 5 year fixed rate loans, so the banks often have specials for these terms.

Most people choose their fixed rate term based on what they believe the future of interest rates will be, and when they expect their circumstances or needs may change, so that they may need to refinance their loan, make a large payment off the loan or sell their property.

You should assess your own future personal needs before you fix your interest rate.

 

[Colin Rice]

Fixed rates are useful if you want predictable payments over a pre determined time frame.

Rates are about fifth on the list in regards to what is important in a loan structure.

I rarely mention it when consulting with clients yet always make sure they get the best deal possible with the lender chosen in accordance with their short medium and most importantly longer term goals and objectives.

When it comes to strategy bank calculators and policy play a much larger part in the equation than the interest rate on offer.