Fixed rate of 2.44%, take it or leave it?

Discussion in 'Loans & Mortgage Brokers' started by htopg, 29th Apr, 2020.

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  1. htopg

    htopg Well-Known Member

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    Hi,

    I have an owner occupier loan of $1,000,000 with a 2nd-tier lender.
    Currently rate is 3.38% variable P+I.
    After 2 rate cuts in 2020, I approached my lender for rate reduction.
    They are reluctant to move from 3.38% variable P+I but they offered me 2.44% fixed with option of 1 year, 2 years or 3 years.
    I am thinking of getting the 3 years fixed option.
    What do you guys think?

    * I am aware of that there are other lenders offer comparable variable rates but refinancing 1,000,000 could be an issue with them.

    Thanks in advance.
     
    htopg, 29th Apr, 2020
    #1
  2. Morgs

    Morgs Well-Known Member Business Member

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    Do you service with other lenders?

    If you can't service then you would need to consider if a fixed rate is suitable for you. Does it have an offset account, what is your outlook on interest rates, etc

    The numbers are one thing but the shoe needs to fit too...
     
    Morgs, 29th Apr, 2020
    #2
    Silverson, Never giveup, htopg and 1 other person like this.
  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Depending on the LVR you could get variable not too far off that.

    If you can't refinance you might want to consider 1 year fixed - if case you can refinance next year.
     
    Terry_w, 29th Apr, 2020
    #3
    htopg likes this.
  4. htopg

    htopg Well-Known Member

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    Big 4 banks do not service.
    Currently, there is an offset account.
    After converting to fixed, the offset account will be gone.
    My outlook on rate is, RBA will go down, but lenders won't move much.
     
    htopg, 29th Apr, 2020
    #4
  5. htopg

    htopg Well-Known Member

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    LVR is 80%.
    Having a variable not too far off is my goal.
    I need a list of "generous" lenders.
    Last time I tried to refinance 1m, HSBC told me that I could only refinance 400k...
     
    htopg, 29th Apr, 2020
    #5
  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    You should prob see a broker.

    There is no need to fix all of the loan either
     
    Terry_w, 29th Apr, 2020
    #6
    Never giveup likes this.
  7. Tattler

    Tattler Well-Known Member

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    Can you split the loans so that part of it is fixed, and part of it is variable so that you can still take advantage of offset accounts, as well as lower fixed rates?
     
    Tattler, 29th Apr, 2020
    #7
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    yes
     
    Terry_w, 29th Apr, 2020
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  9. JohnPropChat

    JohnPropChat Well-Known Member

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    Which Tier-2 lender is this?
     
    JohnPropChat, 30th Apr, 2020
    #9
  10. htopg

    htopg Well-Known Member

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    MortgageHouse
     
    htopg, 30th Apr, 2020
    #10
  11. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Tier 3?
     
    Terry_w, 30th Apr, 2020
    #11
  12. htopg

    htopg Well-Known Member

    Joined:
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    Location:
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    Currently
    PPOR split
    3.38% variable
    $900,000 limit
    $400,000 offset
    $500,000 balance

    Investment split
    3.38% variable
    $100,000 limit
    $0 offset
    $100,000 balance

    What I want to achieve is
    1) save interests
    2) have access to 400k
    3) maximise deductible debt
     
    htopg, 30th Apr, 2020
    #12
  13. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    You should seek tax advice on debt recycling and credit advice on reducing that owner occ interest rate. Even if you cannot move lenders you should be able to save a fair bit on both
     
    Terry_w, 30th Apr, 2020
    #13
    JohnPropChat likes this.
  14. JohnPropChat

    JohnPropChat Well-Known Member

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    Give @Terry_w a call.
     
    JohnPropChat, 1st May, 2020
    #14
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