Top 5 Fixed Loan Refinancing Deals for Christmas


November 9, 2017

top-5-fixed-loan-refinancing-deals-christmas

Interested in refinancing to a fixed interest loan before Christmas? You’re not alone. With all the holiday spending coming up, homeowners tend to pay extra attention to their finances, motivating many to refinance around this time of year. By refinancing, you’ll be able to get a fresh start for the New Year and help meet some of your personal financial goals, such as debt consolidation or doing that kitchen renovation project you’ve been dreaming about for months.

Refinancing to a fixed loan can be an excellent way to stabilise your monthly repayments, making it even easier to stick to your 2018 budget. How can you find the best fixed loans to refinance to? Shop around. Compare rates. Look at the offered features of each loan product and calculate what you’ll pay in fees. Don’t hesitate to get in touch with a mortgage specialist to help you narrow down your search for the perfect loan. An experienced broker can not only hone in on the best loans, but also the ones that will help you achieve your financial objectives. And, the better suited your loan, the more you stand to gain when you refinance to a fixed loan.

The Pros and Cons of Refinancing to a Fixed Loan

If you want to stop worrying about the possibility of rising rates driving up your repayment amount, refinancing to a fixed rate home loan is the way to go. With a fixed loan:

  • You’ll get the peace of mind of fixed repayments.
  • You can plan ahead with your budget instead of having to adjust every time rates, and your repayments, change.
  • If the cash rate goes up, your interest rate will stay the same.

Whilst you’ll enjoy greater predictability, there are drawbacks you should be aware of:

  • Fixed rate loans tend to have fewer features and more restrictions than variable rate loans. You may end up having to sacrifice some of the flexible features you wanted to get the security of a fixed loan.
  • You’ll have to pay a charge, known as the break cost if you want to get out of your fixed term early.
  • If the cash rate goes down, instead of up, your rate will stay the same, meaning you’ll miss out on the savings you could have had with a variable rate loan when rates fall.

When you do refinance to a fixed loan, once the fixed term is up, you’ll either choose of you want to refix the loan to another term, or it will automatically switch to the standard variable rate.

The Top 5 Fixed Rate Refinancing Loans on our Panel

To help you get started, here are the top five fixed loan refinancing deals on our panel, as of the beginning of November 2017. For a $400,000 fixed rate loan on a $500,000 property, with a 30-year term, this is what your loan and monthly repayment amount would be:

The five cheapest fixed rate loans use the following criteria:

  • Rates – as of 9th November 2017
  • Minimum loan amount – No greater than $150,000
  • Maximum loan amount varies for each product
  • Loan amount – $400,000
  • Property value – $500,000
  • Loan term – 30-years
  • Repayment type – principal and interest
  • Borrower type – refinancer
  • Loan purpose – owner occupied
  • Repayment frequency – monthly
  • Interest rate type – fixed
  • Based on – full documentation and exclude construction and line of credit loans.

Suncorp Bank – Fixed Interest – 1 Year

If you are looking for an excellent interest rate with a fixed rate loan, there are several competitive products like Suncorp Bank’s 1-year Fixed Interest loan. At 3.69%, you’ll enjoy an attractive interest rate. The revert rate listed right now as 4.40%, which is what you would pay if you don’t re-fix the loan after the term ends. For fees, you’ll save on the $0 application fee, but the loan does come with a relatively heavy annual fee of $375.

A drawback of this loan is that you won’t be about to access any flexible features like an offset account or redraw facility. You can borrow up to 90% of the loan to value ratio, or LVR, and borrow up to $5,000,000.

With Suncorp, your monthly repayments will be $1,838.

Suncorp Bank
Features
Interest Rate 3.69%
Comparison Rate 4.26%
Offset Account No
Offset Cost $0
Redraw Facility No
Redraw Cost $0
LVR 90%
Annual Fee $375
Monthly Fee $0
Application Fee $0
Monthly Repayment $1,838

 

UniBank – Fixed Option – 2 Year

Also with an interest rate of 3.69%, but for two years, you can lock in your repayments for longer. The revert rate is listed as 4.40%, the same as Suncorp’s. Borrow up to 90% of the LVR. If you still owe quite a bit on your loan, you may not be able to refinance with UniBank; the maximum loan amount is $499,999.

For fees, the application fee is quite large at $600, and you’ll pay $200 in annual fees. UniBank doesn’t offer a redraw facility, something you’ll tend to see more in variable rate loans in general. However, it does come with an offset account, which can make it easier to pay down your loan faster.

Your repayments would be $1,838 each month.

Unibank
Features
Interest Rate 3.69%
Comparison Rate 5.10%
Offset Account Yes
Offset Cost $0
Redraw Facility No
Redraw Cost $0
LVR 90%
Annual Fee $200
Monthly Fee $0
Application Fee $600
Monthly Repayment $1,838

 

Teacher’s Mutual Bank – Fixed Rate – 2 Year

Teacher’s Mutual Bank’s rate is also currently set at 3.69%, with a revert rate of 3.90%. Enjoy extra savings with their free offset account feature, but no redraw facility. You can borrow up to 80% of the LVR, with a maximum loan amount of $2,000,000. Fees are identical to UniBank’s.

And, as with the other top fixed loan options, you’ll pay $1,838 for your monthly repayments.

Teacher's Mutual Bank
Features
Interest Rate 3.69%
Comparison Rate 5.10%
Offset Account Yes
Offset Cost $0
Redraw Facility No
Redraw Cost $0
LVR 80%
Annual Fee $200
Monthly Fee $0
Application Fee $600
Monthly Repayment $1,838

 

MyState – 2 Year Fixed

With this loan, you’ll enjoy the same competitive interest rate, although be aware of a higher revert rate of 5.23%. You can borrow up to 80% LVR, with a maximum loan amount of $3,000,000. The loan is short on features, with no redraw or offset account option, but it is also short on fees. Outside of the application fee, you’ll pay no monthly or annual fees.

The repayment amount will be $1,838.

MyState
Features
Interest Rate 3.69%
Comparison Rate 5.01%
Offset Account No
Offset Cost $0
Redraw Facility No
Redraw Cost $0
LVR 80%
Annual Fee $0
Monthly Fee $0
Application Fee $600
Monthly Repayment $1,838

 

Firefighters Mutual Bank – Fixed Option – 2 Year

This fixed loan product is identical to UniBank’s 2-year fixed loan, offering you another attractive refinancing option if you are borrowing less than $5,000,000. The interest rate is 3.69%, the revert rate is 4.40%. You can borrow up to 90% LVR and will pay the same $600 application fee and $200 annual fee as with UniBank.

Your monthly repayment amount will be $1,838.

Firefighters Mutual Bank
Features
Interest Rate 3.69%
Comparison Rate 5.10%
Offset Account Yes
Offset Cost $0
Redraw Facility No
Redraw Cost $0
LVR 90%
Annual Fee $200
Monthly Fee $0
Application Fee $600
Monthly Repayment $1,838

 

When sifting through your fixed rate loan options, be sure to consider what features you want. Would you use an offset account, or maybe you weren’t planning on using this feature anyway? Do you anticipate refixing your loan when the term is done, or will you end up switching to the revert rate after that first year or two? When you tailor your loan to your financial lifestyle, you are more likely to be satisfied with the product you choose.

Things you should know:

This information does not constitute as financial advice. Terms and conditions, fees and charges and normal lending criteria apply. Information & interest rate is current as at 9th November 2017 & is subject to change. The comparison rate is based on a loan amount of $150,000 over a loan term of 25 years. WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.


Written by Refinancing.com.au

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