AIMS loan @ 5.74% - worth fixing?

(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)

 

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.

 

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

 

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

 

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

 

Agree with @DaveM and @tobe.

Don't give up–keep looking for solutions.

There's almost always a way.