Speaker 1 0:10

Hello and welcome back to that Home Loan Hub . I'm Zibuni Salimova . I'm joined by Kunjai Adams today . Hello , kunj , good morning . Let's talk about refixes .

Welcome & Introduction

Speaker 2 0:20

Yes , I thought we'll yeah cover refixes like what is a refix and what sort of interest rates we're seeing and things like that and when that happens and when that happens .

Speaker 1 0:31

Yeah , Awesome . So topic number one what is a refix ?

Speaker 2 0:36

So a refix is when your home loan , your current fixed loan term is coming off

What Is a Refix?

Speaker 2 0:42

that fixed term . So , for example , you may have refixed for six months and then six months later it's coming off its term , so we call that a refix . So a refix is you get to choose a new fixed term and new interest rate .

Speaker 1 0:59

And normally you would stay with the same bank if you've just got a mortgage in the last three years . Normally , however , if you have been with the same bank for more than three years , this is your golden opportunity to look for a better deal , as we call it , so refixes when a lot of banks at the moment are offering you online rates as well . Yep , so pays to check what have you got , because what they call it now is personalized rates . So , according to your relationship with the bank , you may get slightly better rates than Uncle Bob next door . Yeah , yeah , because you might have , you know , five properties and a $3 million mortgage , versus Uncle Bob next door maybe only has one house and 100K mortgage .

Speaker 1 1:47

Yeah , Now , the important part here not to miss is usually people ask how long should I fix it ?

Speaker 2 1:54

for not to miss is usually people ask how long should I

Choosing the Right Fixed Term

Speaker 2 1:59

fix it for ? Yes , that is hot topic at the moment , Given that we've just recently had a reduction in the OCR and then we've got another announcement , due in July , I believe , or no .

Speaker 1 2:09

August , july , july , yeah .

Speaker 2 2:10

So there is another one coming on board . So a lot of discussion about do you float or do you fix for short term . So , again , these options are personalized to your own personal situation . So you've got to think about , okay , what is going to happen in six months' time as in , are you planning on moving ? Are you planning on selling ? You've got to think about all those things when you come to fixing . Just even earlier , when I had my own refix come up , I actually had to say to Zeb and Iso what do you think , what do I go for ? And she said one little thing when are you going to plan on building your house ? And that's where it helped me choose my term . So , yeah , you've got to think about your own personal situation to help you choose the correct term for yourself .

Speaker 1 3:11

Yeah , correct . And normally when I look at people's situation , we talk about things like hey , are you planning to have a baby or did you just have a baby ? You know , do you just want stability for the next three to five years ? And then , once you know that the kid goes to school , then you'll have more flexibility in your time so you can work more , et cetera , et cetera . So all those things come into play when we're thinking about the refixes .

Speaker 1 3:33

Or are your kids about to leave home and then you know you might sell a house . So if that's the case , you don't want to fix for too long , because if you're going to sell your house , then there will be bigger break fees . If the rates continue to drop , there might be break fees , and that's another thing about the break fees . If you haven't listened to that episode , I did do an episode about the break fees quite some time ago . So go and listen how the break fees are calculated , because they are calculated daily based on what the wholesale rates are doing and how much the bank is losing on you if they let you go . And usually if the break fees are non-negotiable , you have to pay them . There have been certain cases when the bank may negotiate something , but the circumstances have to be quite significant .

Speaker 2 4:21

Yeah , I think over my you know

Understanding Break Fees

Speaker 2 4:23

15 years in the bank , I've never seen someone break fee get waived . Yeah , yeah . So I think there'll be exceptional circumstances if that was ever to happen , exactly , exactly .

Speaker 1 4:33

So very , very important to understand that what works for Uncle Bob next door when it comes to history fix may not work for your own situation . So this episode is not a financial advice whatsoever . Work for your own situation . So this episode is not a financial advice whatsoever . The advice here is to go and seek financial advice with someone like me so we can talk you through your current situation , take into account your current goals and your future goals and , based on that , we can do that . Now , one other thing people don't realize when the refix comes up , this is your golden opportunity to review does the structure work for you ? And we talk a lot about flexible loans , revolving facilities and things like that .

Speaker 2 5:13

Offset facilities and things .

Speaker 1 5:15

Yeah , let's dive into that , yeah .

Speaker 2 5:17

So ,

Loan Structure Opportunities

Speaker 2 5:18

um , revolving credit is a line of credit basically , um your home loan set up as a revolving credit , where your wages usually gets credited into the account , and that offsets the interest that you pay when , because interest is charged daily on those on the revolving credit . An offset is a similar type product but slightly different . So what an offset is is pulls your transactional accounts balances together and that offsets the offset loan .

Speaker 1 5:54

Yeah , so there are different banks provide different products and how it's all structured . And again , this is where it's important to talk to the financial advisor , because we can structure it in a way that maximizes your money to work in the best possible way for you . Because , remember , when the interest rates , ocr , when that goes down , the floating rates go down , the fixed rates go down , but also the term deposit and savings goes down . So if you've got money sitting in your savings account at 3% , it's not doing anything for you if you could be offsetting your mortgage at 5% . So instantly you're making 2% back on your loan . And this is where we can look at your situation . We can say , look , this bank does not have this product , but this other bank has . So how about we refinance you , restructure it and make it work for you in the best possible way , yep , saving you interest payments in the long run .

Speaker 1 6:47

Yeah , so one of the banks I'm banking with . What I love about them is you can actually pull up to 50 different accounts to offset that one , right . So what I've done is I've pulled my

Offsetting to Maximise Your Money

Speaker 1 6:56

kid's savings account money into this particular bank and I've renamed it . I've renamed those accounts into their name , so I know it's their money and I just continue to put money into those accounts like I would for them anyway , but I'm making their money . Help me reduce the interest on the mortgage that I pay .

Speaker 2 7:14

Yeah , it's a great day , great idea , great product , great product , one of my favorites .

Speaker 1 7:20

Absolutely so , guys , if you're sitting there thinking how can I maximize the money , especially with the living cost , you know it's all going up right . The price of butter is ridiculous at the moment , so you know ain't no more cupcakes coming from me with the price of butter .

Speaker 1 7:35

Oh man , we love Quinch's cupcakes , just off the record . And the thing is , you got to start thinking smart . You got to start thinking what can you do for yourself right now to help yourself reduce those interest rates , reduce your repayments or pay off your mortgage faster , et cetera , et cetera . So we're here for you , we're here to help . So reach out . If you've got any questions of this episode you found confusing or you're not sure what to do with that , share it with your friends , discuss it , get their opinions on it , ask them how they've structured it , but don't take their advice how you should structure yours . Go and seek financial advice .

Speaker 2 8:14

Great , Thank you .

Speaker 1 8:18

Looking at you , Coach . Thank you guys and have a wonderful week ahead , see

Final Advice & Closing

Speaker 1 8:21

ya .