changing home loan

[kelbel]

Hi!
I was wondering if you might be able to answer a question please!!! ?
In Feb this year we redone our home loan (changed from a line of credit to a principal/interest loan with the offset account) and the interest was 8.07%
Since last week with the interest rates going up our loan rate is now up to 8.32%.
We have also found that the offset account needs to have $2000 in it to offset the house loan interest payments, and we dont seem to ever get anywhere near that amount of money in the account to help it out! pity!
i have been looking on ANZ website (who we are with now) and it looks like their money saver account is better for us as the interest rate is at 7.32% (i think from memory). Also the repayments are better too which fits in with our budget a little better.
So my ? is.......
Seeing as though we havent had this loan for very long, do we stick with it, or would you suggest redoing our loan for the lower interest rate be better.
Do you know if there is much money for us to pay to change the loan over?
Sorry for the long post, but i have been thinking about this for a while!
Thanks in advance for your time, patience and advice!!!!

Cheers
Kel

[andie_pandie]

Hi Kelly sorry to get back to you so late, my son was in hospital this week and then I came down with the same bug, but all is well now.

To your question, it sounds like you are on the standard variable loan, it is a pity that they did not offer you the money saver up front when you switch from a Line of Credit. The money saver is a basic variable and works similar to the standard variable at a lesser interest rate, however the rate that you quoted it not correct, current it is showing at 7.62%. Maybe the site had not been updated when you looked at it. The difference is no offset account available however you can still offset against the interest by putting additional repayments directly onto your loan, then it is 100% offsetting automatically.

The switch fee is $200 (non credit crucial) and $350 (if credit need to assess), I would think the $200 would be applicable in your case.

Another option if you are worried about interest rates increasing further is to fix your loan, however if you fix and you intend on refinancing out later down the track or selling the property you may be up for early payout interest adjustment. I can not tell you how much this would be as it is dependant on the interest rates and length of time left in your fixed period at the time. Currently the fixed 2,3,5 and 7yr rate is at 7.89%. This is lower that what you are paying at the present time, bear in mind if you go on the money saver it will only take one more interest increase of .25% and you are almost at the current fixed rate.

Please note, that the interest rates quoted above are at todays rates and are subject to change at any time.

Kelly it is your choice on which product you go with so hopefully I have given you enough info to make a informed choice. You can always PM me if you have any further questions.

Have a lovely day.

Regards


Andrea

[kelbel]

Thanks for your advice!
I hope that you and your son are well now.
Thanks for backing up what i thought. Will chat with hubby and see what he thinks too!
Take Care of yourself and your son!
Kel

[andie_pandie]

Thanks Kelbel, all is fine now we definately have had our month of sickness. All taking heaps of vitamins from now on.

I am glad to be of assistance, hopefully you can both make a more informed decision now.

Kind Regards


Andrea