hey
two questions.
first, we are looking at holding onto our two props for the next 5 yrs at least. at the moment they are both variable. but looking at the fixed rates its 0.92% more interest if i go for a 3 yr fixed. with interest rates going up should I look at switching to the fixed? we are comfortable with the repayments at a higher interest rate as both props are CF+ up to 8%.
secondly, with a fixed loan would I still have the same ability to refinance to access my equity?
thanks!
In my opinion, it is too late to go fixed now, especially if you are comfortable with higher repayments. If I were in your position, I would just stay with variable.
If the 3 year fixed rate your lender has quoted you is only 92 bps higher than the variable rate i would be looking to refinance elsewhere.
Realistically the fixed rate would be nearer to 140 bps higher so sounds like you maybe paying over the odds on your IP's.
Yes a lot harder and more expensive to refinance away a fixed rate loan.
Richard Taylor | Australia's leading private lender
yeah im stuck with them for another 2 yrs so i can avoid early exit fees. then im refinancing elsewhere.
but seeing as its harder to refinance on fixed ill leave it variable cos i wanna get access to the funds in 6 months or so.
thanks for the advice.
I never fix any of my loans anymore. I want the flexibility to move from bank to bank or sell and avoid the exit fees.
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
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