Hi All, I'm looking to refinance an investment home loan from CBA to Newcastle Permanent. Has anyone used them? Any feedback? I'm looking to fix a portion of the loan, but I need more than half of it to be variable, because I'm planning to pay a lot of it off in the next few years. I've heard rumors about smaller lenders luring you in with low variable rates, and then increasing the rates after you have signed up. I understand that all lenders are raising variable rates at the moment, and I'm ok with this, as long as their increases are below or inline with other lenders. FYI - I have a great credit history and will be going interest only.
Consider the PI for the variable split then if its your intention to pay it down. Do you have any Non deductible debt or will ever have some ? ta rolf
Hi Rolf, Thanks for your response. I don't currently have any non-deductible debt, but I am currently renting and may like to buy a place to live in down the track. Alternatively, I may buy another investment property when the market settles down, and/or my personal circumstances may change so I thought it would be safer to go interest only, and put as much as I can into the offset account.
Offset with IO is possibly good for your future outcomes, I was confused by your comment stating because I'm planning to pay a lot of it off in the next few years. I assume that your LVR will be below 80 %, and that you didnt pay LMI at CBA ? What is your primary reasoning for the choice or switching of lender ? CBA can be chased to get similar package mix on rates depending on some things even better ? ta rolf
Hi Rolf, Thanks for your message. The total loan is $460k I think the property is worth $570k now. I must have paid some LMI because the property was valued at $500k when I bought it. I would be happy to borrow a little less this time to bring the LVR to 80%. I have money in my offset for my other property. I need to get an offest on this property now because my offset on the other property is almost full. So if i stayed with CBA, I'd need to talk to them about that. CBA started me on a honeymoon rate, but it has now gone to 5.78% (IO) Newcastle Permanent are offering 4.19 variable and 4.09 fixed (3 yrs). Both are IO. DO you think CBA would match that and provide an offset? I've banked with them for many years.
5.78 wow............ now thats a hook rate and a half I can see why youd want to run............ fast CBA Not 4.19 IO variable with offset, nowhere near, but if thats 100 % offset, it doesnt matter what the rate is ? On the fixed, their 2 year priced IO would go to 4.09 mostly, the 3 year we have seen best at 4.19 I suspect something that MAY be important for you, is cash out policy if that property grows in vaue - drawing on equity for the next property. Valuation may also play a part now ? Finally, something like Virgin Money MAY be a fit for you, similarish rates but some decent tax deductible Velocity Points - but be aware, they are very very slow in doing refi loans still - getting better but slow May be worth it for you to sit with the banker/broker and get them to map out how they can build your needs moving fwd, not JUST this transaction . ta rolf
Yes. The CBA rate is super high! My other loan (on my Sydney investment property) is the one that is almost fully offset. It's with St George, IO, variable, 5.20%. The loan that I'm looking to refinance (currently with CBA) is on a Brisbane property. I can only fix about $150k because I'm hoping to put about $100k per year into the offset account. (Unless I buy another property, but I won't even consider that until I have a better idea of where the market is heading, probably 12 months at the absolute earliest.) I forgot to mention Newcastle Permanent also have $1,500 cask back at the moment. I don't think I'd need to draw the loan down for the next property because I have funds in the offset account for the Sydney property. But I do prefer to keep funds in an offset rather than pay down the mortgage so I have the flexibility to use the funds whenever I need to.
But your offset savings Im assuming is tax paid savings and ideally should be kept aside for future non ded debt purchases ? I agree that keeping your cash in offset provides more flex - but only to the extent you use the cash in the right way. Using it for another IP deposit may not be the best if u are looking to buy PPOR down the track. ta rolf
