Fixed Rate & Subdivision/Construction

Hi All,

I have an investment property with an existing house at the front with a big piece of land at the rear. I will start a town planning application in few months to subdivide the land ad to build at the rear. I don't need to refinance the loan to get additional funds for the application nor the construction.

The whole process will take approx 2 years.
Can I fix the loan in the meantime for 2 or 3 years? Or the bank won't give the consent to subdivide or build because it is a fixed loan?

Many thanks.

 

The fact the loan is fixed or variable will not effect the banks decision. Wether or not you will need to sell or refinance the property in the fixed time frame will effect your decision.

 

So you are saying that I can fix the loan, subdivide the land and build, all at the same time. The only thing i cannot do is the sell or refinance during the fixed period. Am i correct?

 

Correct. You can refi or sell but will likely cop break cost fees as a result.

 

Yep, lender will likely check your end position with them via the servicing calc before releasing the security via a discharge. If the remaining position does not service they wont let the security go. May get away with it if you are not cross collaterlsed but still unlikely as lender will be violating NCCP (responsible lending) if they dont check.

This ^^^^^ will undo a lot of future refinance applications Im predicting when multiple properties are with one bank.