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Can any of broker pls clarify

Discussion in 'Property Finance' started by UrbanDingo, 8th Aug, 2015.

  1. UrbanDingo

    UrbanDingo Member

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    I have IO only loan with NAB which is fixed until Dec 2016. I sent an email to my broker regarding revaluing property early next year and using an equity,if any, for purchasing another investment property.
    She replied back " Assuming the valuation comes in higher, any changes including using the equity whilst the loan is fixed, will mean you will incur penalties as it will be seen as breaking the fixed period".
    So that means if I use equity whist fixed it will incur penalty, which is contrary to what I read on forum. Can any broker please clarify.
    thx
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    That is not correct.

    There is no need to break the fixed loan.
     
  3. UrbanDingo

    UrbanDingo Member

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    Thanks Terry
    So that means I can get property revalued and if there is any equity it can be used whilst fixed without incurring penalty.
     
  4. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Yep.

    Should just be a small fee - I think it's a $300 variation fee.

    You're not breaking the fixed loan. You're simply setting up a new loan.

    Cheers

    Jamie
     
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  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Yes that is right. Only a small fee - not a break fee but may be a variation as Jamie says. They may even waive it.
     
  6. bonanzawealth

    bonanzawealth Well-Known Member

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    so if property value was $500k and I took fixed loan $400k for 2 years then property price goes up to say $600k, I can do equity release $80k for IP deposit providing it's split?

    Nice! I was under the impression of not being able to release the kraken during fixed term.
     
  7. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Yes as long as you can meet the other requirements such as serviceability.
     
  8. TaylorChang

    TaylorChang Well-Known Member

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    Correct.

    Just think it as of applying for a split loan facility. Like a portion of loan is fixed and the other portion is a variable loan.

    So what essentially doing is one property, with some fixed and some variable.
     
  9. Doraemon

    Doraemon Active Member

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    lesson learnt