Originally posted by Bob Kane
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Fix or Float - given inflation etc?
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Originally posted by drelly View PostDon't know about other banks but with Westpac if you let an interest only period expire, you have to reapply if you want interest only again.
The interest only periods are for 2-3 years. No letter is sent at the end of the term, it just suddenly appears on the statement that principal & interest is being paid (even in the middle of a fixed interest period). My banks have told me it is normal practice for this to happen with no notice, so I have made reminders to myself. I re-apply over the phone for these periods to be extended for another 2 years as required.
The fixed interest/floating rates are seperate again. These come & go, hopefully in line with low interest rates and I get all sorts of letters about this.
So in short, the loan period, interest only period & fixed interest/floating period have no relationship to each other.
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Well I did it.......and I hope you lot are right about funds being available when a fixed interest only period expires.
Have gone for a mix of fixed rates....split between 1year, 2 years, and 3 years, with a small proportion left on floating.
Of course this will be more expensive than the current floating rate
But I will live with it......even if the glass proves to be half full.
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Originally posted by Ahar View PostI hope you lot are right about funds being available when a fixed interest only period expires.
Have gone for a mix of fixed rates....split between 1year, 2 years, and 3 years, with a small proportion left on floating.
So will your other bits of mortgage, be they on floating or fixed at the time.
Ask the bank when your interest only period finishes and diarise to renew prior.
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Personally, if one could afford to make mortgage repayments based on an interest rate of about 8.50%, I would retain the mortgage on the variable rate and keep repayments at the higher level of 8.50%.This way you have a cushion for quite some time and interest rate hikes should not worry you. Not too sure if there too many takers for this approach but this is the way to go if your finances are sorted.
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Originally posted by PhiCapital View PostGenerally loans can float or be fixed, or a mixture of both, within a defined facility term. Interest only loans are viewed slightly differently and it may be that some form of request for an extension of the I/O period would be required, but that wouldn't be an application for a continuation of the facility itself, just the I/O structure.You can find me at: Energise Web Design
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Originally posted by drelly View PostNot with Westpac. I've been told I need to fill in the full application form again to go on interest only again.
How about calling again and telling them that is crazy and other banks don't require it. I was told I'd have to sign an extention - not an application though - (which means I would have to hassle my trustee again) but I moaned & complained & snarled a bit and I said the other bank didn't require it. I got a call back in 5 mins saying it was all done, no paperwork!Last edited by Tan; 03-08-2011, 09:34 AM.
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Hi Drelly, I have 5 mortgages with Westpac, three are on fixed rates of which two of them are interest only at the moment. When they come off the fixed rate term they just go on normal unless I change them back to interest only, three of the mortgages we have had for nearly 10 years, I have never had to fill out another application form to go back on interest only, I just ring them up, they get the forms ready and we go in and sign. Do you have a personal banker with Westpac?
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I am constantly amazed by the so called economists who keep giving conflicting views on a daily basis.
The main stream banks main interest is to generate revenue, Fixed Interest rates are money in the bag for them so they have a vested interest (excuse the pun here) in them.
As for predicting Interest rates judging that almost all economists mainstream banks and non banks alike all have being wrong since the last developments since Friday. And who didn't see that coming?
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Originally posted by Tan View PostThere is no such thing as fixed interest only. As explained above, if your interest only term is 2 years, your 3 year fixed interest mortgage will suddenly start charging principal as well 1/8/13.
So will your other bits of mortgage, be they on floating or fixed at the time.
Ask the bank when your interest only period finishes and diarise to renew prior.
It's fixed, interest only, and at the expiration will go back to an interest only floating rate loan, OR I can refix for a further period, i.e interest only for x years.
Who do you bank with to make you think what you do?
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Originally posted by Ahar View PostIt's fixed, interest only, and at the expiration will go back to an interest only floating rate loan, OR I can refix for a further period, i.e interest only for x years.
Who do you bank with to make you think what you do?
On the other hand, if we had a very long interest-only period agreed at the start, then ours would also effectively work the way yours do. Except that fixing in the bit I've bolded above would surely imply the interest rate was fixed, rather than the IO aspect.
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Hey Drelly,
I have multiple mortgages with Westpac and have been on IO for a few years now. My personal manager calls me whenever the IO period is coming to an end and he sends me the Docs to sign re. my wishing to remain on IO for another defined period. There has never been any drama about reapplying for the loan amounts as such.
Tell him/her that they can keep their wooly blindfold…
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Originally posted by Marcus View PostHey Drelly,
I have multiple mortgages with Westpac and have been on IO for a few years now. My personal manager calls me whenever the IO period is coming to an end and he sends me the Docs to sign re. my wishing to remain on IO for another defined period. There has never been any drama about reapplying for the loan amounts as such.
Tell him/her that they can keep their wooly blindfold…
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