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Fixing loans - will this have any effect on my ability to get equity releases?

Discussion in 'Property Finance' started by jaybean, 29th Jul, 2015.

  1. jaybean

    jaybean Well-Known Member

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    I assume it's just the difference between being able to top it up and having to setup a new account. So the only downside is I'd be slugged with extra setup and ongoing bank fees. But I'm ok with that, a few hundred isn't going to bother me. Anything else to consider?
     
  2. KDP

    KDP Well-Known Member

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    Eliminates the option of going to other banks if you don't get a favourable valuation/outcome from current bank.
     
  3. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    With all the changes happening at the moment, being locked into one bank could be very disadvantageous - I would only fix now if you're happy to batten down the hatches and prepare to do very little for the fixed term. If you know you are going to need equity, I'd think twice - your lender might pull an AMP and exit stage left, or quit doing cash out for eg. Or as KDP says, you could get stuck with a stupid valuation and have no options left to you.
     
  4. Mick C

    Mick C Well-Known Member

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    Will def limit your equity release opportunity
     
  5. jaybean

    jaybean Well-Known Member

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    Ok so just to be clear, the two main ways it could affect equity releases are:

    1) As KDP said, if they come back with a poor valuation, and;
    2) As Jess said, if they just stop offering equity releases altogether

    Any others? I just want to make sure I have the full picture before deciding:)
     
  6. Hodor

    Hodor Well-Known Member

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    We just fixed two loans for some insurance against changes impacting cashflow.

    The property we plan to refi late this year or early next is still variable.
     
  7. KDP

    KDP Well-Known Member

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    Or change their servicing calculator, LVR policy etc.
     
  8. jaybean

    jaybean Well-Known Member

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    Great thanks guys, I think that gives me the full picture. I'll sleep on it tonight and decide what my fix / var plan is tomorrow. I think I'm leaning on fixing most of them since I'm not even in a position to get refinancing at a different bank anyway, so almost all my loans are stuck where they are.

    I will stagger them so they don't all come off being fixed at the one time.

    And I will leave one variable so I can have an offset account attached to it.
     
  9. WattleIdo

    WattleIdo renovating Premium Member

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    You might be able to get an offset for the fixed loans? It is possible but depends on bank.
     
  10. jaybean

    jaybean Well-Known Member

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    Thanks for the suggestion, had no idea. I'll be sure to ask! Also if I'm 18 months into a 5 year IO term, is my max option 3 years, or can I fix for the remaining period (3.5 years)?
     
    RetireRich101 likes this.
  11. WattleIdo

    WattleIdo renovating Premium Member

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    I imagine that if you're fixing then they'll stick to set time frames (3 years) but something to talk to them about.
     
  12. RetireRich101

    RetireRich101 Well-Known Member

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    For CBA switch form, it has a tick option to continue the IO period, or you can tick the box "new interest period of xx years". AMP requires a written letter to request the change,. NAB doesn't have the option, so I guess it continues IO period regardless of the fix.
     
  13. jaybean

    jaybean Well-Known Member

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    Isn't this a loophole to get an IO extension without refinancing?