Fixed first home loan

[kittykatz]

Hi

Hoping you can help.

We have a no deposit home loan fixed until Sep 08. The interest rate was higher at the time then some loans, but now that rates have gone up significantly, we are paying lower than the interest rates are now for normal loans.

My 2 questions are...

1. If we break the fixed period now, and fix again, will it have less of an impact then waiting till the fixed period is over in Sep and potentially having to fix at even higher rates.

2. Is it possible to move house and change loans (with the same lender) during your fixed period? We have equity in the house now, its value has probably increased 30%

thanks heaps. This is our first home and first loan so i'm only new at this.

[andie_pandie]

Hi Kittykatz

I can see why you are concerned, it is a long way between February and September and there seems to be no let up on the rates at the moment.

It is a very hard question whether you break out at the current rate or wait till it automatically comes out of fixed. You need to consider if you break out now are there any penalties and if you ring your bank they can give you the current amount (you may not have much of a penalty if your rate is lower than current rate however it does depend on your bank and how they calculate the penalties). Also you may have a small fee to refix, so this needs to be taken into account.

If you choose to wait it is hard to know how much they are likely to go up, and even if it went up by .5% on a $200000 this means it would add approx $1000 in interest payments alone.

As far as selling a house and keeping the same mortgage most banks allow portability however the loan amount needs normally to stay the same amount and can not be increased, also the both property need to settle at the same time ie the same day.

If you need anymore assistance feel free to PM me.:flowerz: