Fixed rate investment home loans and EOFY (+ video)
Is June 30 an important deadline for your property investments?
Are you an investor with an interest only fixed rate home loan? Is your interest only and fixed rate term due to expire shortly? If you pay interest annually in advance, your payment will be due in the lead up to June 30.
To qualify for potential tax benefits and depending on your loan type, you may need to have everything resolved and annual interest paid before the end of financial year (which this year falls on a Saturday).
Here are some tips to help you get organised for your fixed rate loan roll over.
How to apply for a new fixed rate period
There are several options available:
- If you’d like to start a new fixed rate period that will end after your interest only period ends, please contact your banker or call us on 13 22 65. We’ll need to talk through the next steps as you’ll need to apply for a new loan. This can take a few weeks to organise so it’s best we start this for you as soon as possible.
- If you’d like to start a new fixed rate period that will end before your interest only period ends then you won’t need to apply for a new loan. Just contact us to choose your new fixed rate period
- If you don’t want to re-fix your home loan interest rate, then your loan will change to a variable rate at the end of the fixed rate period
Depending on what you need to do to update your loan, the process could be a simple one that may just involve a phone call, or submitting a form to re-fix your rate.
Alternatively, if we need to issue a new loan contract, it’s best to allow four weeks for the process to be completed.
How do I know I need to take action?
You’ll receive a letter advising you that your rate expiry period is approaching, Please take the time to consider your banking needs and we’ll be in contact to discuss your options.
We’ll also advise you of the next steps you need to take.
Things to think about
If your home loan is interest paid annually in advance, it will be charged to your nominated account number on the first day of your new fixed rate period. This is particularly important if you are relying on payments being made by end of financial year to qualify for potential tax benefits.
Consider any life changes you’ve experienced during your current loan period and how they may impact your next steps. Allow an appropriate amount of time to organise how you’d like manage your loan from here.
Any new paperwork to sign?
Paperwork must be signed by all parties to the loan application. Allow time for this to happen if joint owners live in different locations.
If your loan is subject to a guarantor, new guarantees will need to be arranged within the new contract. This will require the signatures of all involved parties- make sure you allow sufficient time to get these signatures on your application and any other required documents.
If you’ve had a relationship break-down and you need to refinance the loan independently, make sure you allow sufficient time to make arrangements. Ensure you’ve got all the necessary paperwork to enable this process to happen.
If you need to apply for a new loan, we may request additional verification documents. For example, if you’re now self employed, you may need to provide financial records dating back over the past two years from your accountant. You may also need to provide company returns, partnership returns or trust returns depending on your situation.
If you’re employed as a PAYG employee, you may need to supply payslips.
An updated property valuation may not be required in all cases, but if it’s needed, allow 48 hours for your banker to arrange this.
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