Advice wanted

Hi guys,

I've just placed a contract on a property and am looking for advice on interest rates

We want to go interest only but understand this will incur a higher rate. I've heard that if we take out a principal and interest rate with CBA at around 4% we'll be able to change it over to interest only before settlement for a period of up to 5 years and still keep that same variable interest rate, is this correct?

We're open to other suggestions too. Main thing for us is the lowest interest rate we can get on a variable loan, with the ability to pay into the offset free of charge/fees. We're going through a broker who seems good but as always they love the kickbacks Commonwealth offer I'm guessing from past experience because every single loan we're ever had was with CBA through brokers

Thanks

 

Wrong ... stop taking advice from whoever is giving it to you

 

Kickbacks? What kickbacks?

 

Yes I was somewhat reluctant to enquire about finance here.. Don't worry, I'll see a professional

Cheers

 

If you take out P&I with CBA at the moment it will be 3.xx% pending LVR, TLB and loan type.

Can you clarify what you mean by if you take out a loan...
Because if you select P&I and settle the loan with P&I you can't change to IO straight away after settlement without assessment.
You can change your mind prior to settlement, but your rate wont start with a 3 if it's IO it will be 4.xx%

Have you spoken to your broker why they're suggesting CBA?
What discussion have you had with the broker, they probably have a better idea of your financial situation.
It's a bit hard for people to comment on what's best when most don't have any idea of where you're financially (income/expenses/assets/equity/niche policy..etc)

CBA is a pretty good bank
- good rates for big 4
- decent policy
- decent servicing
- top notch net banking
- reasonable timeframe
- okay front and back end

 

CBA is a bank with lots of niches - they pay about the same as everyone else.

It may well be that you fit one of their niches, which is why you're consistantly directed there.

 

The interest only rate will be higher

You'll need your application reassessed if converting from P&I to IO

There's no kickbacks to brokers - we get paid a commission for setting up your loan. The commission doesn't vary much between banks.

Cheers

Jamie