Variable rate

Hi

Situation is as follows:

Borrowed 700k Westpac in March 2013 (property purchased 840k)
300k was fixed for 2 years at 4.99
400k fixed for 5 years for 5.69

Fast forward to the present and the 2 year fixed rate is up for renewal.

Property is now worth about 1.2/1.3m

I have about 120k excess cash (with the max of 30k in the 5 year fixed redraw account).

Westpac offered last week 2 years fixed at 4.45% or a variable rate with offset at 4.70% for the 300k that is up for renewal.

I plan to choose variable so I can have an offset account as I may purchase a second property in the future.

Questions:

1. What is the best Westpac variable with offset for 300k? I think 4.70% is a little high. Has anyone in a similar position got a better rate with Westpac?

2. Considering that the break fee on the 5 year fixed (with now 3 years is huge around 15k mark), do I have any options in terms of going with other lenders or other strategies until the 5 year fixed is finished in March 2018?

Many thanks.
 
1, base the discount on total borrowings. You may be able to squeeze 1.20% out of them

2, you won't be able to go to another lender under you break the loan. Work out whether you think it worthwhile. If the property is an investment the breakcosts may be deductible in full in the year of braking. You can then get interest savings going forward which may put in you front relatively quickly.
 
I will lte TW answer the question

Your biggest challenge that I see in getting a hot rate is that retentions know you arent likley to run off with the remaining 5 year fixed rate loan and the associated break costs.

having said that with some of the 3 year fixed rates in the early 4s, there nay be change the fixed rate break is quite "affordable"

ta
rolf
 
Rolf is absolutely right. I have helped clients get 1.20% discount when moving to westpac, but you are there already and are unlikely to be able to move without incurring a large penalty.

On reflection you probably won't be able to squeeze much more out of them at all.
 
Hi

I have just obtained 1.3% discount (making rate 4.4%) on my variable Rocket loan with Westpac.

All thanks goes to my Broker/s. She has done a great job.

I will now try and obtain the same discount on the other IP loans which currently have discounts of 1.18%, and 1.2%.

Having said the above, I suspect (as others more knowledgeable than me will confirm), that it comes down to a variety of factors, eg total amount of loans, LVR, good luck).

Regards

Tony
 
Is 4.39% fixed for 3 years considered good in current market? for 90% LVR.
It is 0.2% off the advertised, after some negotiations.

Believe fixed rates already forecast the future expected rate decreases, so not a lot to lose if RBA moves the cash rate down.
 
Hi

Just to close this off, I was the original poster of this thread.

I negotiated Westpac down to 4.47% variable (1.18% discount) for my 300k variable (total lend of 700k with the other 400k fixed for another 3 years).

They originally offered 4.75% which I rejected.
 
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