Lump sum payment into fixed loan

Discussion in 'Loans & Mortgage Brokers' started by grk349, 27th Apr, 2019.

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  1. grk349

    grk349 Well-Known Member

    Joined:
    20th Aug, 2016
    Posts:
    207
    Location:
    Sunshine Coast
    Hi,

    I don't know much about home loans and was wondering if somebody could give an idea about this:

    I just came into some money and paid $100k off my fixed home loan ( there was a $600 penalty).

    When the fixed loan term ends will I be able to :

    a) reduce the monthly payments to reflect the lower balance or
    b) will the repayment remain the same as per the original loan (but with a lower interest charge per payment) or
    c) will the bank just reduce the number of years left on the home loan?

    I would prefer the first choice but don't know how to effect this change?

    Many Thanks
     
    grk349, 27th Apr, 2019
    #1
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,640
    Location:
    Gold Coast (Australia Wide)
    good questions give the current flux in rates

    A lot will come down to the lender

    some lenders will allow you to recast the loan to the same payment terms as before but with a lower balance

    say the loan had 20 years left to run and its previous balance was 300, and is now 200, those lenders will recal the repayments to 200 k over 20 years, from the previous 300

    ta

    rolf
     
    Rolf Latham, 27th Apr, 2019
    #2
    grk349 likes this.
  3. grk349

    grk349 Well-Known Member

    Joined:
    20th Aug, 2016
    Posts:
    207
    Location:
    Sunshine Coast
    Many thanks Rolf,

    I'm with ANZ so will call them to find out. I'm hoping for a reduced payment in 12 months time. Best to find out now rather than be disappointed.
     
    grk349, 27th Apr, 2019
    #3