Just bought an apartment, is it too late to change my home loan structure?

Before I start explaining my problem, I just want to say that the sharing on this forum is absolutely amazing, I've been learning a lot lately by reading posts from @Terry_w and @Jamie Moore.

So a year ago I moved to Canberra for a government grad position and purchased an off-the-plan apartment. The apartment is close to completion now so recently I applied for a great fixed rate (at 3.69%), P&I, no offset account home loan with NAB. However after reading @Jamie Moore's post here, I realise that eventually I'll want to upgrade to a bigger place when I have family and turn my PPOR apartment into an investment property, and therefore I should get an interest-only (IO) loan with an offset account for now.

To change my loan structure, I went back to my NAB banker to see if I can

• split my NAB loan into a 60-40 loan (60% fixed, 40% variable) and create an offset account for the variable part;
  
• increase my loan limit to 80% LVR and put the extra money into the offset, previously I only applied for a 70% LVR because I have some deposit.

The banker seems very reluctant to change my loan application, and at one point even said that I do not respect her work by changing my mind so late into the process.

To be honest I was a bit taken aback by her direct manner, but I can't really fault her. Before the loan application she did ask me whether I wanted a split loan and I had said no, I was also quite affirmative when I said I only needed 70% LVR. I only decided to change my loan structure after much browsing on this forum.

So how should I approach this? I'm thinking to change to a different NAB personal banker or even to a different lender to see if they are willing to split the loan for me, but at the same time I'm concerned that since my NAB banker already applied for a First Home Owner Grant for me, if I change to a different lender it will only get too confusing.

To the moderators, please feel free to move this post to an appropriate sub-forum, I'm new so I might have posted at the wrong place.

Cheers
Ian

 

Hi Ian,

Has the loan been approved yet? When's settlement?

Depending when settlement is will determine if it's too late or not

 

Hi Jess

The loan has been "conditionally approved". Settlement will be in late May (fingers crossed).

 

You just instruct your banker how you want the loan set up. Don't worry what they think - if she complains just state that you refuse to pay more tax for the next 30 years just because it inconveniences you!

 

You've got heaps of time to change it then - if your girl won't do it, find someone who will.

 

Hi Ian

Glad to hear my post helped

The NAB banker just doesn't want to do extra work - it's that simple. It's a poor attitude.

So either 1) request it be redone or 2) take your business elsewhere.

ING still have sharp rates on IO repayments for owner occupied properties - especially at 80% LVR

Cheers

Jamie

 

You should be able to change before you move to formal approval, I would think.

 

Thanks for all the responses, guys, I can see why this forum is so great and full of information. You're absolutely right @Terry_w, as much as I want to maintain a good relationship with my bank, I won't sacrifice decades of deductible tax just to convenience her (hopefully negative gearing will stay amidst of all the political shufflings).

I've decided to give ING Direct and State Custodians a call tomorrow to see if I can get IO loan with offset account, both seem to be offering good rates at the moment. If anyone has had prior dealings with either lenders, please feel free to share your experience.

p.s: will definitely get a broker next time. The more time I spend reading on this forum, the more I realise how little I know of the property game. So many pitfalls for a first home buyer.

Cheers
Ian

 

Keep in mind, if you fix the offset will become useless or non existent.

 

No need to wait for 'next time' to use a broker - you could probably get a broker this time if you want to use one.

 

PS I see no prob with fixing the lot, it all depends on your income.

You could go elsewhere, but am thinking you should be able to change to the way you want as long as the val stacks up for the LVR.

My guess is to get that rate your fixing for less than 3 years anyway ? It is a pretty good rate, after that period you can vary etc anyway.

As above, I would speak to the brokers here, they will know what you can do.

 

Getting the loan changed when it's at the conditional approval stage is incredibly simple and quick (at least it is with the NAB). It's the sort of amendment we'd have completed before the phone conversation ended.

@IanZ if your settlement is at the end of May and you're finding value in Jamie's posts, you'll be far better off to engage him directly and get direct and customised advice. It's tight, but there is still time. It's pretty clear the bank isn't going to do this for you.

 

Can I ask, if you went to a bank direct & got to the conditional stage, can you then go and move to a broker at that point ? Ignoring the income technicalities ?

 

Some lenders will want you to withdraw the previous loan application, often in writing.

 

Ian, find another bank.

After all, all these guys do is rent money.

TV.

 

Get Jamie to find a better lender. Thats what he does !!

 

I call that doing a Liberty.... Do they also advertise it as offset ?

Who else does this quasi offset that should be called a re draw facility ?