Recommendation : refinance homeloan from AMP to ?

Discussion in 'Loans & Mortgage Brokers' started by rooster123, 8th Mar, 2016.

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  1. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    18th Jun, 2015
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    Location:
    Perth WA + Buderim Qld
    ME Bank 4.09%. Unlikely to make too much of a difference though, as they know you're stuck wiht your fixed rate.
     
    Jess Peletier, 9th Mar, 2016
    #21
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    AMP have a terrific global limit facility which if used for proper debt recycling will blow away any interest rate reduction (assuming you have the capacity and stomach for such a process)

    ta
    rolf
     
    Rolf Latham, 10th Mar, 2016
    #22
  3. rooster123

    rooster123 Well-Known Member

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    3rd Sep, 2015
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    Sydney
    Thanks guys you have been very helpful here. As discussed above I spoke with the AMP retention team and this is what I have been offered :

    1) BreakCost for Fixed Portion ( as of today ) : 2352 + 175 = 2527
    2) AMP can revise my VARIABLE RATE to 4.20% from 4.55%
    3) AMP can break my current 4.99% "3 Year Fixed Rate Loan - Principal & Interest "
    and get me to new "3 Year Fixed Rate Loan - Principal & Interest " at 4.28%.

    Now based on this I am very confused to workout on what should we do here for the "3 Year Fixed Rate Loan - Principal & Interest" portion? Should we leave it as it is at 4.99% ( for next 11 months) OR should I break it (pay breakcost) and get new fixed term at 4.28%?

    Offcourse I will ask them to update the VARIABLE RATE to 4.20% from 4.55% so my confusion is about FIXED part :(

    Appreciate your expert opinion.
     
    rooster123, 15th Mar, 2016
    #23
    Perthguy likes this.
  4. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    03 9877 3000
    Hi Stella,

    Here's how you work out the savings or cost of breaking your fixed rate:

    Step 1: Work out the difference in repayments (annual difference):
    Annual difference = Current repayment - Proposed repayment

    There's plenty of P&I calculators online that you can figure out the proposed repayments.

    Step 2: Figure out the proposed saving over the remaining 11 months (saving):
    Saving = Annual difference x 11 / 12

    If the saving figure is greater than the exit cost you've saved money, otherwise you're gambling that rates will increase in the future and you'll save the cost of breaking your fixed rate over the next fixed period. Nobody can predict this.
     
    Peter_Tersteeg, 15th Mar, 2016
    #24
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