A Quick Overview
Details | Description |
---|---|
Customer Goal | To get a lower interest rate than the current revert rate of 5.89%, with a 100% offset account. |
Problem | The client was worried about reverting to a high interest rate. She wanted to refix but also wanted an offset account. |
Loan Amount | $540,000 |
LVR and Term | 67.08%, 30 years |
Income | $90,600 |
Solution | Refinanced to a split loan by choosing the lender that had the lowest rates – 5.39% (fixed) and 4.54% (variable) – and a $3,000 refinance cashback offer. |
The Dread Of Coming Off A Low Fixed Rate
Mary was ecstatic when she bought her first house in 2020 – and at a low interest rate of 1.97% fixed until 2023, too. But her happiness was short-lived. Last year, as Australia started recovering from COVID-19 lockdowns, the inflation rate started climbing, too. To combat this, the Reserve Bank Of Australia (RBA) resorted to increasing the cash rate, causing Mary’s variable rate to go up as well. As each month passed, the cash rate increased, and there were no signs of it falling. By December 2022, it was 300 basis points higher than when it began rising in May of that year. Mary felt restless, as she would come off her fixed rate soon, and was worried about being reverted to a high variable rate.Fearing A High Revert Rate
Mary reached out to us to get a better understanding of how high her revert rate would be. She wanted to fix her home loan again. She also wanted an offset account but that was impossible with a fixed loan. So, she decided to go for a split loan.Splitting The Loan 50-50
Home Loan Experts mortgage broker Rojina Shivabhaki took up the challenge of finding the best rate out there for Mary. First, she needed to know what Mary expected to get from refinancing. She wanted to ensure that everything was communicated well with Mary to put her mind at ease. Mary wanted the following:- To refinance to a more competitive rate
- To find a lender providing refinance rebates
- To find a lender who accepts overtime and penalty incomes favourably.
- Competitive pricing
- Extra repayments allowed
- Redraw
- Professional package
- 100% offset
- Split loan
- 1-year fixed rate: 5.59%
- 2-year fixed rate: 5.89%
- 3-year fixed rate: 5.99%