Refinancing and Fixed or Variable

[Sorry Dude]

Hi all, I am about to go through a refinance on my house and was just wondering if people had any tips or hints on what questions to be asking or looking for. Also with rates being tipped to go up another 4 times this year would it be wise to fix whilst it is still relatively low?

thanks
HH

[Booney]

Having just got into the Investment Property market my advice would be to speak with a Mortgage broker.

You pay them nothing, the back you re-finance with does, so find a broker, speak to them and get them to crunch 5 years worth of numbers for you.

At your current fixed rate on offer, at the current variable on offer and with two or three rate rises per year.

I really suggest you speak to someone who is independant from the banks.

[Sorry Dude]

Having just got into the Investment Property market my advice would be to speak with a Mortgage broker.

You pay them nothing, the back you re-finance with does, so find a broker, speak to them and get them to crunch 5 years worth of numbers for you.

At your current fixed rate on offer, at the current variable on offer and with two or three rate rises per year.

I really suggest you speak to someone who is independant from the banks.

Yeah I have my broker that I originally bought my house from, just wanting to get the perspective of people who have already been through the process.

But thanks Booney

[mighty_tiger_79]

personally ill be staying on variable

as has been mentioned the banks have already calculated any potential increases into the fixed rate

look at a 50-50 fixed/variable

but speak to a professional

[aceman]

Hi all, I am about to go through a refinance on my house and was just wondering if people had any tips or hints on what questions to be asking or looking for. Also with rates being tipped to go up another 4 times this year would it be wise to fix whilst it is still relatively low?

thanks
HH

Get yourself some independent advice, might cost you a few $$$'s but it'll be worth it.

[dedja]

No offence intended to those that use them but mortgage brokers are not independent.

On a personal note I've never fixed a mortgage.

[Psyber]

No offence intended to those that use them but mortgage brokers are not independent.
On a personal note I've never fixed a mortgage.

The term "brokers" in Mortgage Brokers does imply commissions are involved, and that they may, therefore, push the product that pays them best.
I have met one or two financial advisers who claim to not take fees from products, but only from the client, to remain independent.
Most are on percentages of deals written, even if they imply they are independent.

I agree, dedja, about fixed rates - I've never fixed one either on the basis that the banks have already set the rate to make sure they are going to be in front on any rises they expect.
The only time the punter wins with fixed rates is if there is an unexpected surge as in the late 1980s, or they get in early in the slump, carry the higher fixed rate during a short drop and are still on it when rates rise again. I think the banks have closed the last option by limiting how long they will fix rates for...

[devilsadvocate]

No offence intended to those that use them but mortgage brokers are not independent.

On a personal note I've never fixed a mortgage.

Exactly. Brokers can't independent - it's the nature of being an agent.

And to the OP, if you were going to Fix a mortgage, the time to do it was back in 2008 when the world economy was in the doldrums and interest rates were being slashed. Now fixed rates are pricing in all rate rises that will occur this year, so you'll be far better going variable.

My advice is to jump onto the website of as many lenders as possible and do your own research based on their rates, fees and penalties. Some with low rates may have exorbitant fees for setup, monthly loan fees, early exit fees, extra repayment, redraw etc, etc. Some will have ahoneymoon rate that then reverts to a ridiculous rate after the honeymoon period.

Bascially, I'd set up a spreadsheet predicting what you're going to be borrowing, what you can repay and then plug in each lender's terms and see what the result is after 5, 10, 25 years on your balance. You'll be surprised what impact fees etc can have over even 5 years!

[westcoastpanther]

As has been already stated, banks have already calculated future rises in to their fixed charges. I was at a Treasury Management seminar two weeks ago and the advice was always go variable. In the long term, you will always come out ahead staying variable.

The only advantage of fixed is that you will always know how much you are up for......