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AIMS loan @ 5.74% - worth fixing?

Discussion in 'Property Finance' started by jaybean, 3rd Aug, 2015.

  1. jaybean

    jaybean Well-Known Member

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    Location:
    Melbourne
    (just to be clear, the current rate is 5.74%, I'm not sure what the fixed rate is)

    My parents are stuck on an AIMS loan on a crazy rate, unable to refinance away because of their income situation. The rate has always been terrible but they've been trapped for years. It's now P&I by the way since it's about 15 years old. It's an IP not a PPOR.

    With all these APRA changes, is there any sense in locking this down? It's bad now, I don't want to see it get worse for them...

    (we're not trying to refinance anymore, we've explored this at length with our broker and there simply aren't any options, so the question is just about whether to fix or not)
     
    Last edited: 3rd Aug, 2015
  2. Amalgam

    Amalgam New Member

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    Victoria
    Fixing means no refinancing, but also means potentially large costs if the property is sold before the expiry of the fixed period, so what are your parents' plans in the next 3-5 years?

    You saying that income is a problem makes it sound like they are retired. They may need (or want) to sell the property and use their cash to fund their retirement: hey, we accumulate wealth using property to eventually spend it, no?

    If they bought the property 15 years ago, they are probably sitting on a huge unrealised capital gain, and in their position (no equity release), the only way to access it would be to sell the property.
     
  3. jaybean

    jaybean Well-Known Member

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    Na they have enough money and there's almost no scenario where they would need to sell down within say the next 10 years.
     
  4. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    I have had a couple of brokers tell me there were no options, yet another sourced me funding no problems. I would suggest having a chat with one of the gurus from here to get another opinion
     
  5. tobe

    tobe Well-Known Member

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    I'd keep looking. There are always solutions. It's harder with retirement but not impossible, especially for an investment property.
     
  6. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    Agree with @DaveM and @tobe.

    Don't give up–keep looking for solutions.

    There's almost always a way.