Commbank cutting 0

Any word on if BOM are cutting rates?

Our Owner/Occ is with them at 3.03% variable plus 3x investment loans, 2 at 3.03 and one at 3.49.

All are P&I & Variable.

 

We are looking at fixing our PPOR loan at 2.29% for 2 years (Currently 3.03% SVIR). Seems like a no brainer really considering even if the rba cuts lower (which is not looking likely) we still wouldnt get anywhere enar 2.29% What am i missing?

Edit: Changed from 2.19% to 2.29% (typo)

 

You might be missing that when fixed rates were 3.50% it looked like a no brainier to fix. The same thing occurred when the fixed rates were 2.89% a few weeks ago (variable rates were about 3.2% at the time with the same lenders).

2.19% definitely looks really good, it's over 0.5% cheaper than variable. We're also a long way from a recovery and there's a lot that can happen over the next year or two.

 

Cheers Peter. Agree that we are long way from a recovery, however i dont think i'll be beating myself up if they drop from 2.29% to say 2.1% or around there. In your opinion do you think there are better deals on the horizon? Peace of mind would also be important to us at this time.

 

I am wondering just how low 5 years fixed rates will go. Any word on the streets?

 

I hope that 2.19% is still around in September when my current fixed rate ends!

 

Wish I had that negotiating power. Unfortunately I’m stuck staying with CBA as the value of my IP is worth a lot less than my loan so I can’t refinance elsewhere. Is that right? I think that’s what I recall. Im not in a position to refinance.

Anyhow I’ll be happy if I can get a 2. Something fixed with CBA. Sounds good to me.

 

You can't refinance if you're in a negative equity situation. Other lenders simply won't take on the risk.

The CBA's fixed rate offer is pretty much the same as the other Big 4 banks. I imagine this would translate to a reasonable saving for you.

 

Hi

Thanks for confirmation. Yep that’s what I thought from memory. Lol. But a bit rusty.

Yeah. I’m just trying to decide now on whether tofix for 1 or 2 years. I better not leave it too long though.

I got a shock. I didn’t realise it would cost so much to fix. I see it cost $750 to do but I guess you make the money back after a few months anyhow.

I can’t see the Perth market moving for a few more years so it could be wise to fix for 2 years. I worry though what if I have to sell in the next 2 years then I’d have to pay break costs. I’d lose around $50,000 selling though so it’d be crazy to sell. I think I should be able to hang on for a couple more years. Ok so I think I’ve talked myself into fixing for 2 years.

 

What's the $750 fee for? I don't recall the CBA having any fee like this just to fix a loan.

They may be trying to charge a 'rate lock' fee. I really don't think you need to be paying a rate lock fee for a simple switch in the current environment. It's optional and a complete waste of money right now IMO.

 

Like Pete said - doesn't cost $750 to fix your rate - if you have internet banking with CBA it's fairly straightforward to fix and costs nothing to do.

 

Don't the RBA meet next Tuesday to decide if rates should be cut again? I would wait at least until then to see if they cut again before fixing any loans. If they don't cut and their fixed rates for 1,2,3 years remain at 2.84% then I'll fix for 1-2 years.

 

What rates are we getting with

CBA
years?
IO
Fixed
IP

I'm thinking it might be best to try and fix for a single year and once that ends fix for a good amount of years after that at a really low rate as I still think in 12 months time when things won't be much better (my opinion)

My current variable rate is mid 4s and my fixed is 4.24%

However I'm in negative equity

 

Yes good point! Thank I’ll wait till I hear what the RBA do at the next meeting! And see what the banks do after.

Yeah I think I’ll fix for 2 years. Hmmm but then again in a years time fixed rates might have come down further. Maybe it’s best to just fix for one year. I dunno.

 

Hi thanks. Ohhhh. Maybe I got it wrong Im not sure. I’ll watch out for the rate lock fee. Thanks.

 

Ok thanks for the confirmation. I’m not sure what the $750 was for that I saw. Maybe something else.

 

Does anyone know why CBA are saying my repayments will be higher if I fix for one year at 2.84% compared to staying variable and paying 4.28% ?

According to this screenshot they are saying my current repayments at 4.28% are $167 per fortnight but if I lock at 2.84% my repayments will be $228 per fortnight. Why would they be higher if my interest rate is lower ?

 

Is there a chance that it is taking in to account what the interest rate will revert back to after the fixed rate ends?

If you want to compare two interest rates, the calculator here Mortgage calculator - Moneysmart.gov.au does the job

 

Just in regards to additional repayments

We have just got a 600k loan for our first PPOR with ~180k deposit but have also kept ~90k savings

Originally we were going to put 70k of that 90k savings into the loan / on-top of our deposit (ie; would've been 530k loan, 20k savings) but with the uncertainty of Covid 19 we decided to keep a bit of extra cash up our sleeve and have an offset against the loan

However with that I thought I might down the future just be able to chuck a large chunk say 30k extra repayment on the loan, but are these generally all capped at 10k per annum?