borrow over a million

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BMW330Ci
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@bmw330ci
Join Date: 2006
Post Count: 37
May 15, 2006 - 12:02 pm
if borrowing over a million dollars (to purchase a residential property), would the interest rate be lower?
since the interest rate hike, what interest rate should i expect, if i decide to borrow around $1.2 million?
Richard Taylor
Participant
@qlds007
Join Date: 2003
Post Count: 12,024
May 15, 2006 - 12:31 pm
Assuming it was a full doc deal you would probably get 0.8% off the standard variable rate.
Also probably get all fees waived.
Richard Taylor
Residential & Commercial Finance Broker
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Terryw
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@terryw
Join Date: 2001
Post Count: 16,213
May 15, 2006 - 1:05 pm
Yes, depedning on how much over,probably 0.8% discount as Richard mentioned.
Terryw
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Mortgageman
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@mortgageman
Join Date: 2004
Post Count: 164
May 15, 2006 - 11:35 pm
You should be able to do a little better than 0.8 I would think. We managed to arrange a .92% discount off the standard variable rate for a client borrowing a similar amount with multiple properties not long ago, so you should be able to get at least this discount for one property (that would be a total rate of 6.65% variable at the moment).
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Cameron Perry
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Perry Financial Strategies
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Melbourne VIC 3000
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Anitamarshall
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@anitamarshall
Join Date: 2005
Post Count: 79
May 20, 2006 - 12:35 pm
On a $1million loan I would recommend that you take advantage of a 12 month honeymoon rate then at the end of the 12 months pay a switch fee (most lenders charge around $300 but often waive the fee anyway) then switch to a different product.
For example you could get a 12 month honeymoon rate of 6.24% for 12 months with no application, valuation or legal fees then at the end of the 12 months it would revert to the discounted standard variable rate of 7.07% however instead of paying that you pay a $300 switch fee (if that) and swap to a 3 year fixed of 6.84% or 6.87% variable.
The rates I have quoted above are based on the new rates after the rate rise last week.
If you do your sums on the $1million you will save about $6000 in interest by structuring it this way.
Hope this makes sense but if not please let me know and I will go into more detail for you.
Anita Marshall
Advanced Finance Solutions
http://www.advancedfinance.com.au
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