Just a quick question.
Being on a fixed rate at the moment, and considering re-financing to a professinal package, I have a general question about breakcosts.
Now that interest rates have gone up, and may continue to do so, does that mean that breakcosts will be higher or lower?Thanks
Sue [
]“Be careful not to step on the flowers when you’re reaching for the stars”
HI Sue
Break costs should be lower – the costs are based on what is being ‘lost’ by the bank letting you out of the loan. If you are refinancing to a higher rate, theoretically there should be no costs, but then how will the bank have billion dollar profits!?
Cheers
MelThanks Mel,
That is what I suspected (or hoped?), it is indeed good news as I have been wanting to get away from this loan for a while now. I was going to wait until May when the fixed rate ends, but it may be worth finding out a payout figure sooner rather than later.
Keep smiling,Sue [
]“Be careful not to step on the flowers when you’re reaching for the stars”
Hey Sue, it’s definitely worth the ask to find out the payout figure. If it’s good news, then refinance immediately.
If the news is not so good (which is possible, we are talking about banks here[
]), evaluate if you’re going to gain more by the extra funds etc. or just have to wait it out.From memory, the fees are also based on the length of time left in the fixed period, so the longer the more exe.
Cheers
MelHi Sue
Melbear is correct, also, break costs differ with some lenders, your break cost fees should
be stipulated in your loan documentation, and these costs may varydramatically from day to day.
Regards Steven.[email protected]
http://www.mobilemortgagemarket.com.au
Ph: 0402483216I have had a fixed rate loan for a while now, and the break costs were about $5000 6 months ago. This has now come down to about $300, good news.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Wow Terry, that is a massive difference.
When I was young and naive (still am though[
]) I refinanced a citibank loan, and paid about $3k. I thought I had to do it really quickly, so pushed it through. Then when they finally sent me their brochure on how to calculate it, I realised i would have been better if I had NOT been in such a hurry![|)]Cheers
MelHi all
Yes i am in a similar boat with fixed rates a few months ago break costs 3500 now 1100. But hey listen to this for greed. The bank said they now would charge me 360 as an additional fee which they are entitled to do according to them under some clause for each loan.
Then they said plus your stamp duty of 1100 so get a very clear picture of the total cost.
regards
alfAlf, what’s the stamp duty for? If you are refinancing you should be exempt from paying stamp duty on the loan again (unless you go over the original amount).
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Terry
Thats what i was thinking he through it in as we were talking.
This guy comes up with clauses all the time pulls then out of his u know what i reckon.
I told him i was peaved that they were going to charge me for the 360 for each loan as mine are split in three ways. He just laughed and said “well the bank may introduce additonal charges from time to time as we see fit”.
Then he threw in the stamp duty. What got me from the meeting is that my ppor and IP are at this stage x collat. He casually talked about my PPOR as if it was nothing he said well we decide what property we will sell first to get our money i dare say it would be your PPOR.
I am looking to refinance but im not sure what product to go with at this stage. Have had a few quotes etc. Break costs were quite high, now they have come down. So maybe a window of opportunity.
Unless the stamp duty is an SA thing i dont know. You got me thinking now?
cheers
alfG’day Alf…
Geez mate, I wouldn’t cop his fees or his attitude. Why not get in touch with head office and tell them you are seriously considering taking your biz elsewhere.
They need borrowers Alf.
Cheers
BillBill O’Mara
Real Estate,Mortgages, Option Writing & Forex. [email protected]Hi Bill
Yeah i was really annoyed he is my persoanl banker dont really want to get him offside. I just went in with a LOC increase application so i had to smile…lol
When something comes up with another lender then i’ll have something to say. You know every dog has his day.
regards
alfGeez alf, this guy sounds like an A$%%hole!
I too have my own mortgage broker, but i wouldnt be taking that crap.
one of the biggest rules i’ve found and stick to.
get a good team around you and they will look after your interests. sounds like the broker you have is more interested in your money than you.Thnaks guys for your replies. I have emailed the bank for a payout figure. They haven’t gotten back to me so I guess i’ll have to talk to someone on the phone. I’ll let you know what the outcome is.
Sue[
]“Be careful not to step on the flowers when you’re reaching for the stars”
alf, you can always ask for a different personal banker – or ‘demote’ yourself back to normal banking. That should send the message through to them. Also suggest that because of his attitude you are seriously looking to jump ship.
Sue, hope your news comes back [
]Cheers
MelHi all
Thanks for you suggestions. I figured maybe he was talking about refinancing to another loan would incur stamp duty.
He was indicating that x collat is not a big issue and its going to cost to do it.
Where do you find this team that looks after your interests.
Its interesting that every time i’ve let my guard down and let what i thought were good people that i was paying look after my interests ive been screwed or given limited information that has cost me.
I’ve tried to get a team to work with but at this stage no luck. Maybe now i am too guarded?
People on the Forum are great the responses are genuine in most cases.
regards
alfHi Alf,
I had a similar situation to yours. I have also previously refinanced before at a lower interest rate with no costs. My original manager and his replacement where on the ball and investor friendly. Along comes this new guy who disagrees with nearly everything the others have said and starts stoneballing my plans. Let him know that you are going to write a letter or telephone the lender explaining that his incompetence is the reason for you wanting to break costs and take your investing elsewhere. If their serious about you as a customer their attitude and his will change.
C2
“Is it true the more you owe the more you grow until the bank steps in?”As promised, update on breakcost amount. Got my payout figure from my bank today, and the good news is the breakcosts have dropped considerably.
Apparently the cost is now $900 to break a loan of $152000. I’m pretty happy with that. Now to do some mortgage shopping….I hate this bit.
Cheers,
Sue []“Be careful not to step on the flowers when you’re reaching for the stars”
Hi C2,
Stoneballing ? Sounds extremely painful. Gives a new meaning to break costs!
Regards, Phil
There are two “Stamp Duties” in property, one, the biggie, is a duty on purchase and a one-off. The second is stamp duty for “stamping the mortgage document” which has to be done when the mortgage liability changes, such as when you top up etc. This second one is much smaller than the first. It could be the one your “Personal Banker” was referring to. (My wife substitutes a “w” for one of the letters in “Personal Banker”!)
]
]), evaluate if you’re going to gain more by the extra funds etc. or just have to wait it out.
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