Fixing Interest Rates?

Whats everyones thoughts on fixing interest rates for investor loans? The banks are now cracking down on Investor loans and the Rates seem to be going up across the board.

 

Huge amount of lending is currently being fixed by investors - to try cap any potential further rise on interest only and investment lending.

Interest rates have jumped up across most lenders already on investment/IO fixed products, but this is likely to continue so it's a worthwhile consideration. The upward pressure on cost of funding for these products will mean that lenders will need to clawback their profit whereever possible.

 

Yea I have had 0.5% rises on all my variable loans so far in the last 6 months.
So I think I better do something about it before its too late

 

I Don't know whether to look around for another product though.

Macquarie bank is doing 4.84% 3 years
Qudos bank will not fix investor loans
Mystate Bank is 4.94% 5 years

 

Very much depends on your overall picture, there's cheaper rates out there right now but it will depend on what your other goals and long term plans are as to whether you stay or move to another lender while you can.

Speak with your broker to review your options - best to do it as soon as you can before rates and policy shift against you.

 

If they're set and forget IPs then it wouldn't be a bad idea.

Just keep in mind that fixed loans are quite rigid - if you need to sell/refinance then the break costs could be high.

There's also restrictions on extra repayments and you generally can't link up an offset. Having said that - if you've got a PPOR debt (I'm not sure if you do or now) then those limitations on IP loans shouldn't be too much of a concern.

Cheers

Jamie

 

Yes I think a call to the broker would be my best option. got a few questions regarding LMI and my offset account. I plan to hold onto the properties for at least the next 5. But would also like the chance to redraw any equity. I just don't want to get caught with my pants down so best to act soon.

 

I don't plan to sell anytime soon, at least in the nest 5 years. I would need to speak to a broker maybe i can have a portion still variable so i can keep the offset account

 

The real appetite for lenders right now is Principal & Interest. They've got their investment quotas out of control, but interest only lending is well above the regulators benchmarks. If you're willing to consider principal & interest loans, there's some amazing deals available right now.

Additionally there's still some lenders that haven't traditionally attracted much investor attention that are actually quite open to investor business. Last week I managed to secure a loan of 4.39% 5 year fixed, interest only investment.

You won't find it published anywhere and the biggest catch is it's with a very conservative lender making it out of reach for many people.

 

I would be happy to consider P&I if the right deal is there. Would you care to share which lenders they are?

Also who did you get 4.39% fixed through if you don't mind sharing?
Will I have to pay LMI if i switch lenders?
My loans are at 90% and I have paid LMI previously.

 

The brokers here on PC have been advising on fixing rates for a while now.

 

If you want to borrow above 80% with a different lender you'll need to pay LMI all over again. You only get credit for previous LMI if you stay with the existing lender.

The 4.39% deal is a bit exclusive so I'm not able to publicly disclose it. It is with a reasonably mainstream lender

 

What are comm banks fixed rates for investors on P&I.
Am I reading correctly 2 years 4.44% and 3 years 4.54%?

Compared to nabs 2 year 3.98% and 3 years 4.34%?

 

Westpac fixed 5 years is 4.59%, not sure if this is too much or too long.

 

Yeah I'm not a fan of locking in for 5 years just in case I offload.

 

It's always better to stay on std var and never fix any part of the loan.

 

What about fixing half or part of the loan ?
Interest rate can't be lowered anymore again without causing housing bubble especially in Sydney and Melbourne.

 

Nah dont fix any part of it. The banks will have some guy trying to sell you the half half deal fix half and leave half unfixed. Dont fall for that trick. Always best to leave everything on std var.