Question about St George Home Loan

Hi guys:


Good afternoon, I am new here. But I have been read this forums every day.


I really learn from each of your guys. I just want some suggestions regarding


my home loan. You input will be really benefit for me.



So far, our IP home loan with St George Bank. It is variable rate at 4.27%


The loan amount is about 1.37 m. I am thinking to fix part of the loan as


at George Bank web shows 4.05% pa for 3 yrs. I called St George Bank


today. They only can offer me 4.15% pa for 2 yrs fix. If I fix 1 million, it will save


about $ 23 per week at this stage.



Should I fix part of my loan ? or should I keep what it is ?

 

I suggest you discuss this with a broker. There is more to fixing the rate than just saving some dollars per week. Depends on your goals and long term strategy.

 

It depends on your future goals - locking in a fixed rate could cause hassles down the track.

Cheers

Jamie

 

The rates you're quoting appear to be for owner occupied lending but you've indicated it's an IP. I can think of ways this might happen but it's worth keeping in mind.

As already stated, longer term goals may have a role to play here, are you looking for something that's simply 'set and forget' or is there other plans to consider here?

You're also asking a very general question on the basis of saving $23 / week. If that's all there is to it, definitely save $23 per week. What if rates increase or decrease? I can see good business and economic arguments for movement either way.

This is really something you need to have a more specific discussion about with a broker.

 

Hi guys:


Thanks so much for the reply.


My long term goal, I want become good property investor. And using the property to build up


our family wealth. And we can have confortable life.



On the one hand, saving $23 per week ->about $ 92 per month will help me a bit of cash flow.


Good cash flow will be able to afford more investment in the future.



On the other hand, so far, our variable rate is still very good at this stage.

so I am confuse what should I do ?

 

I think as a few posters above have said, if you have a longer term goal you should find a broker to assist you. They can help find you a suitable solution for your circumstances. It is impossible to give specific advice without the full story and knowing your future goals in more detail. In the current lending environment there has never been a better time to have a great broker. Two of which have posted above.

 

Again, talk to a broker. There's plenty of great brokers on this forum who are in Sydney. @Jamie Moore has replied above, he's based in Canberra and does a lot of work in Sydney.

If you want to invest in property having fixed rates doesn't preclude you from doing that, but it can be restrictive depending on your financial circumstances. To give you anything useful about this a broker will need to do a fairly comprehensive analysis of your circumstances.

There's a lot more to finance than simply filling in paperwork and sending off a few payslips to get a loan approved. Saving a few dollars today could have sigificant consiquences later. After selecting the right property, the most important thing to property investing is having the right finance structured properly.

Property Chat is a great resource, but the information is general in nature. You need specific advice.

 

Im not a fan of fixing but it certain circumstances it may work.

You do need to understand the risks and consequences of fixing such as break costs associated with the sale of the property or even the need to refinance (e.g. a poor valuation, change in lender policy, change in income type, servicing/borrowing capacity, etc).

Most lenders are offering rates of around 3.99% to 4.05% as well as cash backs. Westpac is an example of doing 4.05% and they offer $1,250 cashback.

Fixing in these market conditions is attractive but the last thing you want to do is "snooker" yourself. Talk to your banker and broker and get their ok before locking yourself in.

 

The fixed rate market is hotting up, particularly with some of the borrowing capacity changes incentivising a period of consolidation in portfolios.

In terms of frameworks to make your decision, fixing will reduce your flexibility to move around and tie yourself with that lender (break fee involved). Its worth discussing what this 'flexibility' could mean to you. This is where things get specific to your individual circumstances.

Once you have more clarity on that point, you'll be better able to weigh up the cost benefit of fixing and risk benefit vs the flexibility cost.