NAB fixed vs variable

Hi I'm considering fixing all my three NAB loans given variable interest rate rises ... I have two IP loans laying P and I at the moment and a PPOR paying P and I. Other reasons for fixing for two years are possibly having another child in the next couple of years . Would I be best to fix all (also have an IP with CBA fixed...) or leave one variable (PPOR)... And will my offset still be an offset if loans are fixed ? Many Thanks!! Anna

 

Your offset won't be an offset if the loans are fixed, but to get around this you can split the loan first, and just fix a portion. This way you can leave hte offset against the variable part and get the best of both worlds.

 

You may want to consider leaving at least some of the PPOR debt variable so you can utilise an offset account against that portion. NAB does not offer an offset against their fixed loan products.

If you are going to fix with NAB you may want to submit a pricing request and rate lock form ASAP, the rumour is NAB will be increasing fixed rates in two weeks, sooner if any of the other banks also increases their fixed rates. The good thing about NAB is you can request a rate lock prior to submitting an application.

 

I have a problem with this rate lock concept in terms of paying a fee so the bank can spend a month shuffling around the paperwork and updating their systems. A rate lock should only be charged because the BORROWER has not decided which way to go and wants flexibility. Not because the bank takes too long to get the admin done. Am grappling with this issue as we speak.

 

I agree, for a refinance you should just get the rate when your documents are verified, everything else is just paperwork. It makes more sense for a purchase where there will be 90 days before settlement. NAB are currently on 11 business day turn-around, so unfortunately a rate lock is almost a necessity.

 

Can NAB do better than a 3.89% fixed for 3 years?

 

Yes, it will depend on the size of the loan. I had a pricing request approved for 3.84% 3 years fixed (investment, interest only) on a $450,000 loan two days ago.

 

im surprised the principal and interest rates are not lower than the principal only..like choicelend

 

Very good point, I should have clarified, sub-80%.

 

Agree with splitting a portion of the loan.

I have good discount with my variable rates with St George atm. If I was to fix a portion, for say 2 years, and once we get reverted back to variable after the 2 years, I'd have stronger position to negotiate to get the original discount on my variable. Would this be right?

 

I would say not, here's Retaining existing discounts on new lending a thread where a guy with Bank of Melbourne (same as St George) was unable to have his existing discounts applied to his new loan. You may end up in the same situation when the loan comes off fixed.

 

They said to me yesterday that to do this a full credit check is required.

The offset account remains, but does not offset anything until fixed period ends, they said.

 

This only applies when you try and fix a portion, right ? because it means it is new loans when you do part ?

If you fix the lot, it should be the same product and discount/s when fixed ends ? I think that is right with NAB, maybe others are different

 

With NAB, does the loan revert to P & I at the expiry of the fixed loan or does it go back to IO (and variable) till the original IO period expires?

 

When thinking about whether to fix or not over multiple properties, I also think about what your plans are over the coming years for each of your properties - are you likely to want to sell, renovate/subdivide (ie alter in some way) to pull out equity? How do your properties contribute to your overall plans in the coming years

I like to leave at least one (IP) as a variable loan - thinking about both sides of the coin - what happens if you had to sell in a hurry (costs a lot to pay out a fixed rate loan), or if you received some money that you could pay off a mortgage (can't put in more than about $20K depending on who the loan is with).

Same applies to the PPoR loan - it sounds as though you aren't looking to move, but what if you had to pull out equity for some reason or wanted to put money into the loan?