No break cost fees on fixed loans.

Discussion in 'Loans & Mortgage Brokers' started by Barny, 8th Mar, 2016.

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  1. Barny

    Barny Well-Known Member

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    Thought I'd share what's currently happened.

    Yesterday I had 822k investment loan with bom Interest only loans fixed for 2 years. I had 1 year and 5 months remaining at 4.39%.
    Through com bank interest only investment loans of 350k which was also fixed for 2 years, but 1 year 5 months remaining at 4.49%
    I called up to see what the break fees were going to be prior to refinancing and fixing some loans up correctly, as @Jess Peletier, has managed to get me some fantastic rates. Big thanks.
    Turns out I have no break fees what so ever, both bank lenders were shocked when they found out, and had to check 3 times to clarify it was correct.

    When I asked 5 months ago, I had roughly 3000 break fees from bom, and about 1000 from com bank.

    Anyone understand how this is possible?
     
    Barny, 8th Mar, 2016
    #1
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Investment loan rates have risen due to APRA etc in the past 5 months. The variable rate is now 0.5% higher in most cases. Variable rates around 4.8% mean this is higher than the fixed so they will break it no fee. But unlike the good old days they wont pay you a benefit.
     
    Paul@PAS, 8th Mar, 2016
    #2
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  3. Barny

    Barny Well-Known Member

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    Interesting. I would have thought they still could have made a profit from me breaking my fixed rates as I can now get cheaper fixed rates than what I had locked in place.
     
    Barny, 8th Mar, 2016
    #3
  4. Simon Moore

    Simon Moore Residential & Commercial Mortgage Broker Business Member

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    Last edited: 8th Mar, 2016
    Simon Moore, 8th Mar, 2016
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  5. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    CBAs rates are higher today than they were a few months ago.

    The irony is they'll immediately turn around and offer 4.19% 3 year fixed at the moment. Break your fixed rate at no cost, turn around and refix 20 points lower. The CBA's pricing policies is good for new borrowers, but they're really just hurting themselves right now.

    Keep in mind that they'll probably charge a processing fee to do this, but it's almost certainly worth it.
     
    Peter_Tersteeg, 8th Mar, 2016
    #5
    Barny likes this.
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